Political Uncertainty & Crude Oil Prices Play The Show Spoiler

Political Uncertainty & Crude Oil Prices Play The Show Spoiler

FY17-18 Ends On A Downside

Our Analysis

This week market witnessed selling pressure from 10,900 levels as investors took this opportunity to book some profit due to domestic & global political uncertainty. Also indias retail & wholesale inflation rise for the first time in four months due to higher crude oil prices & fall of Rupee against Dollar which left RBI MPC for hawkish commentary & also can expect a rise of interest rate sooner or later. earnings remained mix as Bajaj Finance, Bajaj Finserv, Hindustan Unilever reported steller numbers while most of the PSU banks disappointed with numbers. Going forward political stability & crude oil prices with earnings will remain event to look.

This Weeks Market Highlights:

Benchmark Indices:

1. The benchmark indices started the week on a quiet note as Sensex & Nifty closed flat, ahead of Karnataka election result.

2. Banking & financial, Pharma stocks supported the market while Realty & Auto closed in red. Nifty midcap was down over 1.3%.

3. On Tuesday market started on a good note but closed lower as BJP fell short of the majority in Karnataka despite emerging as single largest party.

4. Nifty Realty & PSU Bank index tumbled over 2% while IT, metal & private banks supported the market. Nifty midcap index was down 179 points.

5. On Wednesday equity indices closed lower as Sensex fell over 150 points while Nifty closed below 10,750, amid uncertainty over Karnataka Govt. formation.

6. On Thursday market extended losses as Sensex dipped over 250 points while Nifty below 10,700 as Brent crude oil prices rises to $80/Bbl.

7. On Friday market opened lower & continued to trade under selling pressure.

Sectoral Index:

- This week also story for midcap & smallcap stocks remained same as selling pressure continued despite some good earnings growth as investors still thinks that stocks are still marginally overvalued. On sectoral index almost all index traded under selling pressure.

- This week global market also remained under pressure as Crude oil prices rises to $80/Bbl & uncertainty over sanctions of U.S. on Iran as EU nations united against U.S. regarding the issue.

Movers & Shakers

Consumer lender Bajaj Finance Ltd reported a 61% surge at Rs.721 crore in its net profit for the Q4, beating Street estimates by a mile and even bucking a seasonally expected slower final quarter. The non-banking financial company is confident its housing loan subsidiary would deliver high double-digit growth rates despite the intense competition in the market. Shares of the company surged over 15% this week as investors cheered the growth.

Shares of Adani group firm Adani Transmission dipped over 20% this week despite company posted 58% jump in profit to Rs.150.70 crore but revenue fall slightly to 3% at Rs.810 crore. The company's board also approved a proposal to raise up to Rs.5,000 crore through various instruments including issuance of equity shares and convertible bonds through QIP.

Key Market Drivers

In Karnataka the drama continue as BS Yeddyurappa and the BJP have been invited to form the government in Karnataka. They will have up to fifteen days from when he takes office to prove his majority in a floor test, said Governor of Karnataka. As asked by Governor BJP candidate BS Yeddyurappa took oath today morning. The Congress has moved the Supreme Court against Karnataka Governor Vajubhai Vala's decision to invite BJPs Yeddyurappa to form the government in the state and sought an immediate hearing.

Retail and wholesale prices in India rose in April giving the monetary policy committee more reason to consider a hawkish stance at its meeting next month. CPI stood at 4.58% while WPI stood at 3.18% in April, overturning a three month slide from its peak, according to data released by the Central Statistics Office. Also Indias trade deficit widened to $13.72 billion in April.

Event Watch

India M3 Money Supply will be on 23rd May 2018. Monetary aggregates, known also as "money supply", is the quantity of currency available within the economy to purchase goods and services.

Q4FY18- Tata Motors, HPCL, IOC, SBI, GAIL, Colgate, Bank of Baroda, NCC, Sun Pharma, Tech Mahindra, PC Jewellers, India Cement, United Spirits, Cummins, Grasim, Godrej Industries, Motherson sumi, KPIT Tech.

Global:- FOMC minutes will be on 23rd May 2018. US Manufacturing PMI & Services PMI will be on 23rd May 2018. Also GBPs GDP (QoQ & YoY)will be on 25th May 2018.

Stocks To Watch

Bajaj Finserv is on the upside while Punjab National Bank is on the downside.

 

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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