Market Volatility Increases Tracking Global Cues

IT, Pharma, Metal Stocks Push Markets to New Highs

Our Analysis

The indecisive Indian share market which was in the range bound from last 5 week has been spooked by the tweet of President Donald Trump threatening to more than double the existing tariffs on China. Indeed deteriorated the sentiment of investors all over the globe, As a Result, the Bears got active in D-street and dropped the market below its important support levels. Among all the heavyweight Reliance industries was the one with the sharp sell-off and also one of the reasons to sudden fall in Nifty.

Apart from the worsening trade war scenario, Many other news flows contributed to the swift and furious fall. The FII, in contrast to the mammoth infusion in the month of March and April this year, changed their course and were the net seller. Also, the march result of FMCG firm shows stress on consumption on the rural front, with the most company reporting a subdued number and the concern of slowdown likely to remain in the coming quarters for FMCG.

Going ahead, All the attention will be on the trade talks between US and China, further, the trend of the market is likely to be dictated by the domestic events like Q4FY19 earning session and macro data (IIP, CPI, WPI). Moreover, the market participant will also keenly watch the progress of the general election. We expect the market to remain volatile considering the overall event. The Indices is likely to give a short term pullback but the overall trend remains in the downside and will remain so until the election results.

This Weeks Market Highlights:

Benchmark Indices:

1) On Monday, After the Gap down opening the index throughout the session witnessed the selling pressure. The consumer durable was the most active space in a days trade. slowdown and the decline in the volume Growth was the key concern for which space remained too much active. The Sensex closed at 38600.34, while Nifty dropped by 114 points closing at 11598.30.

2) On Tuesday, Indian share market had a Gap up opening, however, the closing results were the same Nifty was down by 110.35 points at 11497.90, Sensex closed at 38276.63. The D-street in the last session has witnessed a sharp decline led by the Reliance and the Banking stock namely ICICIbank which were down more than 3 percent. With-the-sharp-fall, the indices have breached the important support levels.

3) On Wednesday, Indian share market closed on the day's low, The heavyweight Reliance which was down 3.41 percent at the closing dragged the Indices lower with Nifty closing at 11359.45 and Sensex declined by 487 points finished at 37789.13 Mark.

4) On Thursday, Sensex was down by 230.22 at 37558.91 While Nifty closed at 11301.80. On the sectoral front, Media, IT & Reality were the top gainer, On the other hand, Energy, Metal & Infra were among the top losers.

5) On Friday, Indian equity benchmarks opened higher after falling for seven consecutive trading sessions.

Broader Index & Global Market:

On the global front, The Indices witnessed the turmoil after president Trump tweeted regarding the trade war escalation, Reacting to the news the Asian market plunged more than 3 percent, the US market also faced high volatility.

In the broader market, The Mid & Small Cap had traded mixed in this week. However, they had shown strength as compared to benchmark indices.With the result oriented action continued to take place.

Movers & Shakers

Shares of Tata Chemical surged nearly 7 percent. the company after several lackluster quarters, it finally churned out a healthy set of earnings, signaling improvement across segments in the March quarter.

Shares of Reliance Industries dropped more than 9 percent in a week after After the brokerage firm Morgan Stanley downgraded the company to equal-weight, maintaining the target at Rs 1,349 per share.

Key Market Drivers

  • President Donald Trump dramatically increased pressure on China to reach a trade deal, saying he would hike U.S. tariffs on Chinese goods this week.
  • The National Highway Authority of India (NHAI) is looking to rope in equity partners for funding highway projects in a bid to raise more funds and get around the problem of muted private investment.
  • India April Nikkei services PMI at 51.10 Vs 52.0 in March.
  • RBI is likely to conduct at least one more swap of rupees for dollars after the general election.
  • 57% down in India's oil imports from Iran in April.
  • Foreign portfolio investors can invest in municipal bonds.
  • The Reserve Bank had warned on the rising risks to fiscal consolidation of the states as the finances are saddled with farm loan waivers, income support schemes and the Uday bonds for their power distribution companies.

Event Watch

International:

  • China Industrial Prod YoY
  • The US-China trade talk
  • Crude Movement

Domestic:

  • India Industrial Prod YoY
  • India CPI YoY
  • India Wholesale Prices YoY
  • India Trade Balance
  • Q4FY2019 Earning
  • INR Price

Stocks To Watch

DCB Bank & RBL Bank On Upside while M&M & Graphite on Downside.

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ABOUT AUTHOR

Niveza Editorial Desk : We are a team of stock market nerds trying to stay ahead of the herd. We spend our grey cells everyday to a pave a smooth road for our clients in the shaky world of stock market. While tracking the mood swings of the market we bring our clients the most rewarding deals.

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