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Markets gained during the week after losing ground for the previous two consecutive weeks. BSESENSEX was up 989.85 points or 1.68 per cent to close at 51,793.18 points. NIFTY gained 293.90 points or 1.68 per cent to close at 17,833.35 points. The broader indices saw BSE100, BSE200 and BSE500 gain 1.60 per cent, 1.67 per cent and 1.73 per centrespectively. BSEMIDCAP was up 1.86 per cent while BSESMALLCAP was up 2.53 per cent.

Indian Rupee gained 22 paisa or 0.28 per cent to close at Rs 79.58. Dow Jones lost on the first two days and then gained on the remaining three days to end the week with gains of 833.27 points or 2.66 per cent to close at 32,151.71 points.

In primary news, there was one listing, one issue which had opened for subscription and also closed and a third which had its roadshow. The issue from Dreamfolks Services Limited listed on Tuesday and fared well on expected lines. Shares which were issued at Rs 326, saw a discovered price of Rs 505 on BSE, a high of Rs 550 and closed at Rs 462.65. By Friday, shares lost some ground and closed lower at Rs 430.80.

The issue from Tamilnad Mercantile Bank had tapped the markets with its fresh issue in a price band of Rs 500-525. The issue was subscribed 2.85 times with QIB portion subscribed 1.62 times, HNI portion was subscribed 2.94 times and Retail portion was subscribed 6.43 times. There were 1.33 lakh applications. Considering the issue, the response from QIB's could at best be said as tepid.

The issue from Harsha Engineers Limited opens on Wednesday the 14th of September and closes on Friday the 16th of September. The price band is Rs 314-330. The company makes bearing cages as its key product and supplies to leading bearing manufacturers not only in India but also globally. Japanese manufacturers have begun to buy from Harsha and this could be a big boost in revenues going forward.

The company reported revenues of Rs 1,321.48 crore for the year ended March 2022 and a profit after tax of Rs 91.94 crore. The PE at the top end of the band is 27.73 times. The company has undergone a restructuring exercise and has amalgamated all its businesses under one name. This has diluted the equity to some extent and while the basic EPS for the year ended March 22 was 16.06, on a diluted basis it works out to Rs 11.09. The share and the business look attractive.

Coming to the markets in the week ahead, our markets would find strong resistance at the 17,750-800 levels and 59,450-59,550 levels. While we have almost closed at the above levels, we need to break out of them and sustain at higher levels. In case they do manage to break these levels for any reason, the previous tops made at 18,000 and 60,400 would be very strong resistances in the period coming up. Strong support exists at 17,350 and 58,200. If these break then the next level would be 17,000-17,050 and 57,250-57,350. For a clear trend to emerge, 17,000 and 57,250 on the lower side and 18,000 and 59,550 on the upper side need to be decisively broken. Currently we have no news or momentum in the markets to break these levels.

The strategy would be to buy on dips and sell on rallies. One interesting development that has taken place in the last week, was that shorts in the futures were squared off to a large extent and to that effect markets have become hollow. In case there is any bad news and markets take a beating, the fall could become sharper than expected. Trade cautiously.