Big bang missing in Muhurat trading Sensex hits new high in tepid session; Nifty reaches record closing level of 6,317
Rajesh Desai
On Sunday, the special trading session on Indian bourses to mark the beginning of Samvat 2070, a new year for traders according to the Hindu calendar, proved to be a tepid affair. During the 75-minute Muhurat trading, the BSE benchmark Sensex rose as much as 0.6 per cent to a record 21,321.53 but could not hold on to early upsides. The index, which had on Friday touched 21,293.88 — for the first time in almost six years — on Sunday closed at 21,239.36, up 0.2 per cent over its previous close.
The NSE Nifty, on the other hand, posted a record closing high of 6,317.35, exceeding its previous record of 6,312.45, set on November 5, 2010. Its highest level in intra-day trade remains 6,357.10, hit on January 8, 2008.
Traders, however, were hardly inspired by the new records. During the session on BSE, they went about placing their token trades for the day — in a stark contrast with the Muhurat trading of 2007, when traders had greeted index surges with vociferous cheering.
Mid- and small-cap shares were in focus on Sunday, as domestic traders usually buy these on Muhurat for token investments. BSE’s mid-cap index rose one per cent, while the small-cap index gained 1.4 per cent.
Analysts said the lacklustre response reflected the apathy among confused investors, who had been mere spectators in the Sensex’s rise or had cut their existing holdings.
Katie H Panthaki, who could be in her seventies, attended the Muhurat trading but did not punch even a single trade.
“I used to trade until five-six years back. Then, I decided to stop because my brother told me it had become quite risky,” she said. Now, she merely holds on to the shares she already has, among those blue-chip ones like HUL she inherited from her father.
Brokers said many investors shared Panthaki’s views on the market. This is the reason why investors have chosen to stay out, despite the Sensex gaining about 14 per cent and the Nifty 11.3 per cent since the previous Muhurat trading on November 13, 2012.
“The broader market has not participated in the rally. We could see it happening in the next few weeks. I don’t expect it to be a runaway rally, since a lot of fundamental factors have yet to turn around. Demand is slowing; this can be seen in retail and auto sales. Manufacturing data also suggest that a turnaround has yet to happen,” he said.
“I would advise retail investors to tread carefully. They can’t be out of the market in a situation like this but they should be prepared to move out if they sense trouble,” he added.
Analysts said many retail investors were still stuck in small- and mid-cap shares, which were still 50-70 per cent away from their all-time highs, of January 2008.
“If the market rally has to sustain, there has to be movement in the mid-cap stocks as well. We are already seeing movement in some of the B-group stocks. If that sustains, we could see the retail coming back into the market,” said Citrus Capital Director Sanjay Sinha. There also are some hopeful voices, expecting a bounceback for the equity markets in Samvat 2070 — after most of the previous year was plagued by currency depreciation and fear of a dip in foreign flows.
Investors will closely watch the outcome of the country’s general elections in April 2014. The Street is hoping a Bharatiya Janata Party-led NDA government, if it comes to power, will revive sentiment and investments.
Siddharth Shah, chairman of the BSE Broker’s Forum, is betting on more sanguine days for the markets ahead.
“The market has outperformed whenever polls have been announced. IT stocks, as well as the banking sector, could do well, though the latter is expected to be more volatile,” he said. Stocks of technology, pharma and other export-oriented sectors have gained on the back of a falling rupee.
A lot would also depend on how foreign institutional investors react to the news of US Federal Reserve’s road map on tapering of its monetary stimulus. Market participants are uncertain about the outlook when a rollback is announced.
CA. Rajesh Desai