The past week unfolded as anticipated, with market reactions centered around the IT results declared on Thursday. The ensuing explosive market movement breathed new life into a previously consolidating market.
Out of the five sessions, markets recorded gains on four, concluding the week on a positive note. Despite substantial losses on the opening day, the net gains were somewhat tempered compared to the remarkable surge witnessed on Friday.
Friday's gains translated to approximately 850 points on the BSE Sensex and 250 points on the Nifty. The week's closure saw the BSE Sensex up by 542.30 points or 0.75%, reaching 72,568.45 points, while the Nifty gained 183.75 points or 0.85%, closing at 21,894.55 points.
In the broader market, BSE 100, BSE 200, and BSE 500 registered gains of 0.81%, 0.76%, and 0.79%, respectively. BSE Midcap saw a rise of 0.45%, while BSE Smallcap surged by 1.56%. Noteworthy sectoral gainers included BSE IT, with a 4.58% increase, and BSE TECK, securing the third spot with a gain of 3.93%.
The Indian Rupee exhibited strength, gaining 23 paisa against the US Dollar throughout the week, closing at Rs 82.92. Dow Jones, on the other hand, posted gains on three out of the five trading sessions, concluding the week with a 0.24% increase at 37,592.98 points.
Looking ahead, the IPO from Medi Assist Healthcare Services Limited is set to tap the capital markets, with an offer for sale of 2,80,28,168 equity shares in a price band of Rs 397-418. The issue, scheduled to open on Monday (January 15) and close on Wednesday (January 17), is expected to raise between Rs 1,127 crore and Rs 1,171 crore. The strong anchor investor allocation indicates widespread interest among mutual funds, insurance companies, and FPIs.
Medi Assist, a market leader in third-party TPA in the health insurance sector, reported revenues of Rs 504.93 crore for the year ended March 23, with a PAT margin of 14.54%. The issue, with a PE band of 36.66 to 38.60 times, is anticipated to set a benchmark in the industry.
Reflecting on the market dynamics, the IT sector, previously underowned and oversold, experienced a turnaround post the expected results. Notable gains in HCL Tech, Infosys, Tech Mahindra, and TCS, along with contributions from heavyweight Reliance, propelled the benchmark indices and shifted sentiment.
Recalling the sharp rally post the state election results in December 2023, there is a potential for a further 10% rally from those levels by the time of the general elections in April and mid-May 2024. However, the journey may not be smooth, with expected corrections and consolidation along the way.
In the upcoming week, markets are likely to build on the breakout, responding to the ongoing results season. The recommendation is to focus on large-cap stocks, considering the relative quietness of FPIs and a shift toward large-cap stocks by domestic institutions. As the budget approaches, characterized as a vote on account, the strategy involves cautious trading, leveraging dips for buying opportunities and capitalizing on strong rallies for selling. While the mid-term view is bullish, a measured move is expected rather than an unbridled ascent. Trade cautiously.
(With Agency Inputs)
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