Mkts hovering in non-directional mode, may remain volatile

Markets in the period of November 3-9 saw gain on two of the four trading sessions and loss in remaining two sessions. On a net basis, markets hardly did anything and BSE Sensex gained 127.46 points or 0.21 per cent to close at 61,033.55 points, while NSE Nifty gained 74.15 points or 0.41 per cent to close at 18,157.00 points. The climb in the period under review has been tough and markets seem to be finding the going tough. Whether it would lead to a correction sooner than later is yet to be seen.

The US Fed at its meeting on Wednesday raised interest rates by 75 base points on expected line. This was the fourth consecutive 75 basis points hike. Interest rate band in the US is now 3.75 per cent - 4 per cent. Dow Jones had a veryvolatile session on Wednesday, the day when the hike was announced. Markets post the hike, rallied sharply and gained close to 500 points and after the gain, settled lower by 505 points. Effectively, it had a loss of almost 1,000 points from the high to the close. Dow lost on the first two days of the week and gained on the remaining three days of the week. Dow was up 507.63 points or 1.55 per cent at 33,160.83 points for the week.

Fusion Microfinance Limited had tapped the markets with its fresh issue of Rs600 crores and an offer for sale of 136.95 lakh shares in a price band of Rs350-368. The issue was open between the periods of November 2nd to 4th. Unlike DCX, the issue received a tepid response from the non-institutional portion. The issue was overall subscribed 3 times with the QIB portion subscribed 8.53 times, HNI 1.41 and Retail 0.53 times. It appears the microfinance sector is not seeing traction currently in the markets.

The issue from Bikaji Foods International Limited was oversubscribed. The offer for sale of 293.74 lakh shares was in a price band of Rs285-300, had opened on Thursday the 3rd of November and closed on Monday the 7th of November. The issue was subscribed 26.93 times with QIB portion subscribed 80.63 times, HNI portion subscribed 7.09 times and Retail portion subscribed 4.75 times.

The issue from Global Health Limited which had tapped the markets with its fresh issue of Rs600 crores and an offer for sale of 507.61 lakh shares in a price band of Rs319-336 was subscribed 9.75 times overall. The issue had opened on Thursday the 3rd of November and closed on Monday, the 7th of November. The issue was overall subscribed 9.75 times with QIB portion subscribed 29.51 times, HNI portion 4.07 times and Retail portion 0.89 times.

The issue from Kaynes Technology India Limited opens on Thursday the November 10th and closes on Monday, November 14th. The issue consists of a fresh issue of Rs530 crores and an offer for sale of 55.84 lakh shares in a price band of Rs559-587.

The issue from Inox Green Energy Services Limited opens on Friday the 11th November and closes on Tuesday, November 15th. The price band of the issue is Rs61-65. The issue size is Rs740 crores, with a fresh issue of Rs370 crores and an offer for sale of Rs370 crores.

There are two other issues which were covered in my article published on Wednesday in the newspaper. They are from Archean Chemical Industries Limited and Five Star Business Finance Limited. These issues are opening on Wednesday the 9th of November and would close on Friday, the 11th of November.

Coming to the markets in the period November 10th to 16th, expect markets to remain volatile and undecided. Inflation number would be declared in the US on the 10th November and that would have a significant impact on the markets in the days to follow. This would also have a bearing on the rate hike which would happen in December in the US and would be the last hike for the calendar year. The strategy would be to buy on sharp dips and sell on rallies. With the bulk of the results for the quarter is out of the way, not much of news in the offing. Trade cautiously.

(The author is the founder of Kejriwal Research and Investment Services, an advisory firm)