Market Ended on Cautions Note on RBI’s Warning

Our Analysis

Domestic markets started cautiously positive and witnessed a strong rebound as it gained momentum from expectations of another set of relief measures. The new stimulus package is expected to focus on boosting the worst-hit sectors like tourism, aviation and hospitality along with MSMEs. Value buying was seen in the IT sector while Metals stocks remained in the correction phase due to muted international commodity prices.

On the global front, UK and US Manufacturing PMI data reported record-high numbers however investors are awaiting inflation data for guidance on monetary policy. Besides, rally in global markets as a host of central bank policymakers pledged to keep monetary policy loose despite recent signs of an uptick in inflation pulled investors towards riskier asset classes. Recently, US Federal Reserve officials had reaffirmed a dovish monetary policy stance, assuaging concerns over rising inflation. Now, the European Central Bank policymakers have said that it may be too early to discuss tapering of emergency bond purchases.

This Weeks Market Highlights:

Benchmark Indices:

1) On Monday, Sensex settled 111 points, or 0.2 per cent, higher at 50,652 levels while the broader Nifty index closed at 15,198 levels, up 22 points or 0.15 per cent.

2) On Tuesday, Sensex gyrated within a band of 490 points and eventually settled 14 points lower from previous day's closing at 50,637.5 levels. On the NSE, the Nifty defended the psychological level of 15,200 and shut shop at 15,208, up 11 points.

3) On Wednesday, Sensex gyrated within a band of 490 points and eventually settled 14 points lower from the previous day's closing at 50,637.5 levels. On the NSE, the Nifty defended the psychological level of 15,200 and shut shop at 15,208, up 11 points.

4) On Thursday, Sensex ended 98 points, or 0.19 per cent, higher at 51,115 levels. Nifty index leaped 66 points to settle at 15,338.

5) On Friday, Sensex index was quoting at 51,423 levels, up 308 points or 0.6 per cent while the Nifty was at 15,436-mark, up 98 points or 0.64 per cent.

Broader Index & Global Market:

- NSE gives participant wise OI data and they divide the participants into Clients, FIIs, DIIs and Proprietary books. The Clients which are predominantly directional investors, have a net long Open Interest which is the highest in last 3.5 years. This shows that there is extreme bullish sentiment prevailing in the market. This is also borne out by the spreads prevailing in the market which was upwards of 7% annualized.

- World stocks were pinned down as investors awaited US data expected to offer clues on inflation. The Euro STOXX 600 lost 0.2 per cent, with German shares down 0.5 per cent and London's main index making slim losses. France gained 0.1 per cent. The MSCI world equity index, which tracks shares in 49 countries, was flat. Earlier, MSCIs broadest index of Asia-Pacific shares outside Japan clawed back losses to trade flat at 695.37. Japan's Nikkei, South Korea's Kospi, and Hong Kong's Hang Seng slipped 0.3 per cent, 0.1 per cent, and 0.2 per cent, respectively.

Movers & Shakers

Shares of Natco Pharma surged 20 per cent to Rs 1,188.95, also its new high, on the BSE in the intra-day trade after the company said it has received approval from the US health regulator for the generic version of Celgene's multiple myeloma drug, Revlimid (Lenalidomide) capsules in US. Lenalidomide capsule is indicated for treatment of adults with multiple myeloma, mantle cell lymphoma and myelodysplastic syndromes.

Shares of Sun Pharma, down by 5 per cent to Rs 669, as the company reported a lower-than-expected profit after tax (PAT) in the March quarter (Q4F21) due to lower other income.

Key Market Drivers

• Coronavirus vaccine
• Lockdown
• Q4FY21

Event Watch

International:

• Coronavirus vaccine
• USA PMI
• China PMI
• UK PMI

Domestic:

• Coronavirus- vaccine
• Q4FY21
• India GDP growth rate, PMI

Stocks To Watch

Dish TV Ltd On Upside while, HDFC Bank Ltd on Downside.