After life time highs achieved expect consolidation

Markets continued to gain ground and make new life-time highs on the benchmark indices. BSESENSEX gained 1,549.94 points or 3.70% to close at 43,443.00 points while NIFTY gained 454.40 points or 3.72% to close at 12,719.95 points. The broader market saw BSE100, BSE200 and BSE500 gain 3.74%, 3.60% and 3.53% respectively. BSEMIDCAP was up 3.06% while BSESMALLCAP was up 2.77%. Markets gained on four of the five trading sessions.

Muhurat trading for Samvat 2077 was held on Saturday the 14th of November saw brisk and optimistic trading. BSESENSEX gained 194.98 points while NIFTY gained 60.30 points making the benchmark indices hit new lifetime highs yet again.

The Indian Rupee lost 40 paisa or 0.54% to close at Rs 74.60 to the US Dollar. Dow Jones hit a new lifetime high and gained 1,156.41 points or 4.08% to close at 29,479.81 points. The high that Dow Jones hit was at 29,933.83 points beating the previous 29,551.42 points recorded on 12th February 2020. In US elections the last state has been called and the final tally would appear to be 306-232, a similar number to what had happened in 2016 when Donald Trump had beaten Hilary Clinton. While Donald Trump is still contesting some states, it seems to be delaying tactics more than anything else.

The public issue from Gland Pharma was subscribed 2.06 times on the back of institutional support who subscribed their portion by 6.40 times. Non institutional portion remained undersubscribed with HNI at 0.51 times and Retail at 0.24 times. The company had tapped the capital markets with its fresh issue of Rs 1,250 crs and an offer for sale of 3.48 cr shares in a price band of Rs 1,490-1500. The issue would list on Friday the 20th of November.

The buoyancy in the capital markets could be attributed to the liquidity in the system and also to the measures being periodically announced by the government to kickstart the economy. FII's have in the present month of November till date bought equity worth Rs 33,232 crs while Domestic institutions have sold equity worth Rs 20,301 crs.

In the current November series NIFTY has gained 1,049.15 points or 8.99% and we still have 8 trading sessions to go before the month or series expires. While the momentum would remain intact and so would the trend, it seems highly unlikely that it happens without consolidation. Market to remain buoyant needs to consolidate at these new lifetime highs before charting further upward movement. Expect the week ahead to witness some of this consolidation happening.

On the covid-19 front, the world saw 5,43,29,104 patients, 13,18,286 deaths and 3,78,71,375 people recovering. In India we saw 88,14,992 patients, 1,29,674 deaths and 82,05,728 patients recovering. During the week the world saw 40,65,146 new patients, 61,932 deaths and 23,21,222 patients recovering. In India we saw 3,07,238 new patients, 3,512 deaths and 3,33,760 patients recovering. As numbers, number of patients recovering is encouraging. However, we need to ensure social distancing strictly as the country continues to unlock.

The week ahead starts with a trading holiday on Monday post Diwali. Expect markets to consolidate in the week ahead. Whether it happens on Tuesday or a day or couple of days later is not as material as the fact that consolidation and spending time at similar levels is. Expect markets to become volatile and experience high intra-day two sided movements with little or no change on an end of day basis. The momentum and trend would remain intact for some more time. The strategy should be to sell into strong rallies and buy on sharp dips. Enjoy the festive times.