Market Khabar

Spooked by the sharp fall in bank stocks and renewed concerns over delay in rate cut, markets after hitting lifetime highs during the early part of the week shed all the gains on the Muhurat day to close on a weak note during the week ended. Benchmark indices Sensex and Nifty closed modestly lower by 42 points and 20 points at 32,390 and 10,147 respectively.

With the IPO of General Insurance (GIC) last week, fund-raising through IPO has crossed `44,000 crore in 2017 and is the highest amount raised in the past 28 years. Strong appetite from institutional and retail investors could see as much as `65,000 crore being mopped up via IPOs in 2017.

Analysts, however, are sceptical on oversubscriptions of IPOs and overvaluations are becoming a market worry.

2008 was the year of mega IPOs. It is pertinent to recall that after Reliance Power’s IPO was oversubscribed 73 times and the markets were rallying to a new high, the markets then crashed on the listing day reflecting the result of irrational exuberance of those times. History repeats in stock market. Be cautious say old timers.

Overall earnings season will be closely watched due to the impact of GST that has been implemented with effect from July 1. The full impact of GST will be reflected in Q2 earnings.

Near term direction of markets will be dictated by Q2 earnings from biggies like Infosys, ITC and others, F&U settlement, currency changes and global cues.

For the week ahead, chartists predict trading range of 31,850-32,800 and 10,000-10,275 for the benchmark indices.