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points on Monday itself. The remaining days of the week were spent in trying to recover from there and it was an uphill struggle with markets making some recovery but not enough to close in positive territory. BSE SENSEX lost 425.14 points or 1.37 per cent to close at 30,672.59 points while NIFTY lost 97.60 points or 1.07 per cent to close at 9,039.25 points. The broader markets saw BSE100, BSE200 and BSE500 lose 1.13 per cent, 1.17 per cent and 1.21 per cent respectively. BSE MIDCAP was down two per cent while BSE SMALLCAP lost 1.54 per cent.The Indian Rupee was under pressure and lost Rs 0.39 or 0.52 per cent to close at Rs 75.95 to the US Dollar. Dow Jones ended the week with gains of 779.74 points or 3.29 per cent to close at 24,465.16 points.Super cyclone Amphan hit Orissa and West Bengal and then went into Bangladesh leaving a path of destruction behind it. The state of West Bengal already coping with the pandemic Covid-19 is now struggling with a new calamity, the worst cyclone in last 21 years.RBI's monetary policy committee in its bi-monthly review meet cut repo and reverse repo rates by 40 basis points to 4 per cent and 3.35 per cent respectively. There is a plenty of liquidity in the system, but banks unwilling to lend looking at the current crisis with business and industry trying to limp back to normal. Its like a catch 22 situation, where unless you lend and take a risk with some bad debts and some delayed payment, there will not be any restoration of normalcy of the economy.Reliance industries rights issue has opened and so has trading in the rights renunciation of the issue. There is a new development in the same which is being traded in electronic form and the premium is completely different from convention. In normal circumstances, the premium used to be a percentage of the difference between the market price less the rights issue. In this case the premium is higher than the difference. The same is based on future discounting of cost of capital. The rights issue is at Rs 1,257 and the closing price of the share on Friday the 22nd of May was Rs 1,432 implying a difference of Rs 175. The rights renunciation/entitlement is trading between Rs 215-235. Taking a mid-price of Rs 225 it becomes a premium of Rs 50. This is based on the assumption that if one bought the right and applied for the share, he would be entitled to all the rights of a Reliance share and would pay only a fourth of the amount. The balance amount would be paid in two instalments of 25 per cent in 12 months and 50 per cent in 18 months from now. This would effectively mean a saving on cost of capital of 10 per cent interest for an average period of 14 months of Rs 950, amounting to Rs 105.Coming to covid-19, the number of affected people globally has increased to 54.68 lakh people with 3,44,041 deaths and 22.49 lakh people recovering. In India, the number of patients has shot up to 1,31,920, while people who have died is at 3,869 people. Those who have recovered is at 54,441. Since writing the previous week, the number of new patients globally has increased by 7.46 lakh people, while those dead has gone up by 28, 000 and people recovering is up by 4.35 lakh. In India, new patients have increased by 41,000, while deaths have gone up by 1,000 and people recovering has increased by 18,600. The lockdown is being eased in many parts of the country and helping in creating the path to restoration of normalcy.One area of concern remains Mumbai and Maharashtra, which leads the country with the greatest number of patients at over 44,500 cases. The number could go up sharply as more and more people are tested in the sprawling slums of the city which understandably have poor sanitation conditions and do not observe social distancing. The frustration of the administration can be seen where they are unwilling to open Mumbai for air traffic, but want the railways to begin the local trains in Mumbai. The impact of the resumption of local trains at this point can be debated till the cows come home but to no conceivable benefit in the struggle to contain covid-19.The week ahead will continue to be choppy and volatile with two sided movements. The market has a trading holiday on Monday and is therefore only a four-day week. May futures expire on Thursday the 28th of May and currently bears have the upper hand with the series down 820.65 points or 8.32 per cent. While there can always be some recovery on this, it looks unlikely as the broader uncertainty in India on recovery from covid-19 and the same globally is quite sketchy and patchy. It would take a couple of months before the roadmap is out and things start falling in place. In such circumstances, the strategy would be to use rallies to sell and sharp dips to buy, but be very patient.(Arun Kejriwal is the founder of Kejriwal Research and Investment Services. The views expressed are personal.)( With inputs from IANS )

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