Mumbai: This week the markets are likely to focus on key global events and heated action in initial public offerings (IPO) ahead of the end of the financial year on 31 March. Analysts said that volatility in the markets is expected to continue due to upcoming state elections and political developments in the US.
According to Jimeet Modi, founder and chief executive officer, SAMCO Securities, the markets seem to remain volatile as valuations are expected to come down further to reasonable levels on the back of liquidity moving out of the system. “Also, the financial year-end liquidity pressure will only strength bears case. Selling is also likely to increase as long-term capital gains currently enjoy zero taxation till current financial year. Additionally a subdued performance in UP bypolls will also have some more side effects," he added.
Vinod Nair, head of research at Geojit Financial Services, said that rising concerns of global trade headwinds, domestic non-performing assets (NPA) issues and upcoming state elections will keep market on tenterhooks. “Currently, the markets are finding it difficult to stay afloat at support levels as volatility in global market brought the benchmark indices towards the 200 daily moving average (DMA). US Fed policy meet is the key event and the market expects a 0.25 basis points (bps) hike," Nair said.
All eyes are on the outcome of the Federal Open Market Committee (FOMC) meeting scheduled on 20-21 March headed by new Federal Reserve chief Jerome Powell. The committee will decide whether to raise interest rate by 25 bps. After hawkish comments by Powell, the central bank is expected to increase rates more than three times as anticipated earlier.
Meanwhile, the primary markets are likely to seek a lot of investors’ attention as new IPOs are lined up. Two issues that opened for subscriptions last week, Bandhan Bank Ltd and state-owned Hindustan Aeronautics Ltd (HAL), will close on Monday and Tuesday, respectively. The Rs4,470 crore IPO of Kolkata-based Bandhan Bank witnessed an overall subscription of 88% on Friday, the second day of the share sale. The Rs4,230 crore IPO of HAL, which opened on Friday, was subscribed 24% on the first day of bidding.
Sandhar Technologies Ltd’s IPO will open for subscription on Monday, with a price band of Rs327-332 per share. It aims to raise close to Rs512 crore.
ICICI Securities, an arm of ICICI Bank, will open its share sale on Thursday with a price band at Rs519-520 per share to raise around Rs4,000 crore.
The IPO of Mishra Dhatu Nigam Ltd (part of government’s divestment plan) will open on Tuesday with a price band of Rs87-90 per share. It looks to raise Rs438 crore through the IPO.