Next week may be a little volatile at the start as the trade war threatens to become a full-fledged currency war. The feeling came after Donald Trump suggested that China and Europe are both manipulating their currencies.
This week, the Sensex and the Nifty did not exhibit great volatility, but, carnage in some of the small and midcap stocks continued.
The fall was even greater in stocks where results were declared, if they were from the midcap space or small cap space. Take the shares of HT Media, where the results disappointed the market. The stock lost close to 10 to 15 per cent in a few trading sessions.
Another small cap stock that plunged was PC Jeweller. The stock which had closed the last week at Rs 120, ended the day lower by more than 35 per cent and closed the week at Rs 81. The company had withdrawn its buyback offer, after some objections from bankers.
Bajaj group companies were all over the place, on account of their results. Bajaj Finance and Bajaj Finserv saw a huge uptick after a spectacular set of results while Bajaj Auto lost as much as 8 per cent on Friday, after its quarterly numbers lagged estimates.
Wipro will react to numbers when trading opens on Monday. In all probability we would see a positive reaction as the company's numbers manage to beat expectations.
The IT firm said that net profit for the three months to June 30 rose to Rs 2,120.8 crore. This was much better than analysts expectations. Interestingly, the rupee hit a new historic low on Friday at 69.12, which should support prices of IT stocks.
While the markets are near historic highs, the broader markets are languishing. As many as 332 stocks hit 52 week lows on Friday, as investors dumped the midcap and small cap stocks in favor of the more sanguine large cap. It will not be a surprise if the trend continues into the next week.
International developments would be closely watched, especially on escalating trade and currency tensions, between the US and other countries. Movement of crude oil would also be tracked by analysts, as we could see volatility in the commodity. If markets fall, it would be a good idea to buy on dips in quality names, with a sound management.