Markets in precarious equilibrium | MorungExpress

IANS | September 11th

Markets rose during the week after losing ground in the previous two consecutive weeks. BSESENSEX rose 989.85 points or 1.68% to close at 51,793.18 points. NIFTY gained 293.90 points or 1.68% to close at 17,833.35 points. The broader indices saw BSE100, BSE200 and BSE500 gain 1.60%, 1.67% and 1.73% respectively. BSEMIDCAP increased by 1.86% while BSESMALLCAP increased by 2.53%.

The Indian rupee gained 22 paisa or 0.28% to close at Rs 79.58. The Dow Jones lost the first two days, then gained the remaining three days to end the week with gains of 833.27 points or 2.66% to close at 32,151.71 points.

In the main news, there was a list, an issue which had been opened for subscription and also closed and a third which had its roadshow. The Dreamfolks Services Limited number was listed on Tuesday and performed well on the expected lines. The shares which were issued at Rs 326, saw a short price of Rs 505 on BSE, a high of Rs 550 and closed at Rs 462.65. On Friday, the shares lost ground and closed lower at Rs 430.80.

The Tamilnad Mercantile Bank issue had hit the markets with its new issue in a price range of Rs 500-525. The issue was subscribed 2.85 times with the QIB portion subscribed 1.62 times, the HNI portion was subscribed 2.94 times and the Retail portion was subscribed 6.43 times. There were 1.33 lakh apps. Given the problem, QIB’s response could be described as lukewarm at best.

The Harsha Engineers Limited issue opens on Wednesday 14th September and closes on Friday 16th September. The price range is Rs 314-330. The company manufactures bearing cages as its key product and supplies to major bearing manufacturers not only in India but also globally. Japanese manufacturers have started buying from Harsha and this could be a big revenue boost in the future.

The company reported revenue of Rs 1321.48 crore for the financial year ending March 2022 and profit after tax of Rs 91.94 crore. The PE at the upper end of the band is 27.73 times. The company underwent a restructuring exercise and merged all its activities under one name. This has diluted equity to some extent and while basic EPS for the year ended March 22 was 16.06, on a diluted basis it equates to 11.09 rupees. The action and the company look attractive.

Looking to the markets in the week ahead, our markets would find strong resistance at the 17,750-800 and 59,450-59,550 levels. higher levels. In case they manage to break these levels for some reason, the previous highs made at 18,000 and 60,400 will be very strong resistances in the period ahead. Strong support exists at 17,350 and 58,200. If these break, the next level would be 17,000-17,050 and 57,250-57,350. For a clear trend to emerge, 17,000 and 57,250 on the lower side and 18,000 and 59,550 on the upper side should definitely be broken. Currently, we have no news or momentum in the markets to break these levels.

The strategy would be to buy on dips and sell on rallies. An interesting development that took place last week was that short futures positions were largely offset and to that effect markets went bottom. In case there is bad news and the markets are roughed up, the drop could become steeper than expected. Trade cautiously.