Markets to end 2019 calendar year with a broader move (Column: Market Watch)

Markets began the last week of the calendar year on a negative note and lost on three of the four trading days during the week. They gained only on Friday and recovered a substantial portion of the losses but still ended the week on a negative note.

BSESENSEX lost 106.40 points or 0.26 per cent to close at 41,575.14 points while NIFTY lost 26 points or 0.21 per cent to close at 12,245.80 points. The broader market saw BSE100 and BSE200 lose 0.08 per cent and 0.02 per cent respectively while BSE500 gained 0.06 per cent. BSEMIDCAP gained 0.63 per cent and BSESMALLCAP was up 1.17 per cent.

The Indian Rupee lost 24 paisa or 0.34 per cent to close at Rs 71.36 to the US Dollar. Dow Jones gained 190.17 points or 0.67 per cent to close at 28,645.26 points.

As mentioned earlier, the week was down for the first three trading days which ended with a sell-off on expiry day. Thursday saw the BSESENSEX lose 298 points and NIFTY was down 88 points. December futures expired in the negative with losses of 24.60 points or 0.20 per cent. At the start of the week, the series had seen gains of 120.65 points or 0.99 per cent.

Friday, the beginning of January futures, was a different event altogether. BSESENSEX gained 412 points and NIFTY was up 119 points. Reliance on expected lines and as mentioned last week was down. It lost Rs 57 or 3.56 per cent to close at Rs 1,542.

The week ahead would see the listing of Prince Pipes and Fittings Limited. The company had tapped the capital markets with its fresh offer of Rs 250 crore and an offer for sale of Rs 300 crore. The issue was subscribed 2.21 times. The listing is expected to be tepid and under pressure as the grey market premiums have disappeared and the share is quoting at a discount.

The week ahead has two trading sessions in the calendar year 2019 and then the remaining in the New Year 2020. There would be NAV propping or supporting over the next two days of the midcap and smallcap stocks as mutual funds and more so portfolio managers look to juggle their performance. This will help in reducing the losses that the midcap and smallcap indices have suffered in the calendar year 2019.

There is speculation that the list of stocks which have been classified as largecap, midcap and smallcap would be relooked at by SEBI in the coming days and weeks. What would be the final outcome of such a review, if any, is highly speculative, but the street believes that the midcap and smallcap stocks would get a better deal. One can only keep one's fingers crossed and hope for the best.

The calendar year is coming to an end and the benchmark indices would have ended with flying colours. Assuming there are no major changes in the remaining two days, BSESENSEX would have moved from 36K levels to 41.5K while NIFTY would have moved from 10.8K levels to 12.2K. The gains during the year would be in the region of 15 per cent for the SENSEX and about 12.5-13 per cent for NIFTY.

The week ahead would be divided into distinct halves with the first being the remaining two days of the calendar year where NAV propping would be the order of the day in the midcap, smallcap and micromini cap space. New Year's Day would be a very low volume day as almost the whole world enjoys a holiday except Indian markets. The second part of the week would be the remaining two days of the week where there would be volatility and the bulls and bears begin their tussle for supremacy again. Markets would be going nowhere. The undertone, however, is bullish and one should use dips to buy into the market.IANS