Finblab Research: Indian Stock Market Weekly Analysis (28 May ’18 to 01 Jun ’18)

In the absence of positive trigger from the domestic front, it was the global news like political turmoil in Italy, Brent crude oil prices, INR-USD movement, and the certain geopolitical news keeps the Indian Stock Market volatile all through the week!

The BSE Sensex on the week ended 01 June 2018 gained 303 points whiles the NSE Nifty gained 92 points as compared to previous week. Here is an Indian Stock Market Weekly Analysis (28 May 2018 to 01 June 2018) by Finblab.

28-5-2018 (Monday)

• Strong and positive trading session as far as Indian Stock Market is concern!
• Indian Stock Markets started off the week on a strong and positive note, rallying for the 3rd consecutive day – thanks to (1) sharp decline in Brent crude oil prices {as Russia and Saudi Arabia may increase supplies} and (2) recovery in Rupee against US Dollar.
• The BSE Sensex today rose 241 points to close at 35,165, while the NSE Nifty gaining 84 points to close at 10,689.
• Construction major Larsen and Toubro (LT) today presented its Q4 numbers during market hours! The Company beats the analysts’ expectation and reported a 4.6% rise year on year (YOY) in March quarter consolidated Net Profit at INR 3,167 Cr (3025 previous quarter); Revenues of the company grew by 11% to INR 40,678 Cr in Q4FY18 as compared to INR 36,828 Cr of last year.
• Overseas order inflow for the company for Q4 was stood at INR 8,678 Ct, while the total inflow of orders for the quarter came in at INR 49,557 Cr. Consolidated order book of the group at the end of FY18 stood at INR 2.6 lakh Cr.

29-5-18 (Tuesday)

• A day of profit-booking at the Indian Stock Market!
• Indian Stock Markets failed to continue its winning up-tick for the fourth consecutive day and lose more than 200 points (the BSE Sensex) due to profit booking by the institutional investors. Sharp fall in the rupee against USD also spoiled investor’s sentiment.
• The BSE Sensex today falling 216 points to close at 34,949, while the NSE Nifty shedding 55 points to close at 10,633.
• State-run power equipment maker Bharat Heavy Electricals Limited (BHEL) today announced it Q4 numbers after the market hours. The Company has reported more than double growth in March quarter Net Profit at INR 457.2 Cr (215.5 Cr during last quarter) on the back of strong operational income. Revenue from operations of the company during the Jan-Mar quarter grew by 3.7% to INR 10,144 Cr as compared to INR 9,779.5 Cr in the corresponding period last year.
• The Company said the outstanding order book stood at INR 1.18 lakh Cr at the end of March 2018 (highest in last 5 years). The company has booked orders worth INR 40,932 Cr in FY18 up by 74% compared to FY17.

30-5-18 (Wednesday)

• A volatile trading session at the Indian Stock Market!
• Indian Stock Markets today ended marginally lower after a volatile trading all through the day! The investors and traders’ trade cautiously ahead of the expiry of May futures & options contracts on Thursday.
• A couple of news that force the indices to trade volatile are (1) political confusion in Italy (globally investors seems to be worried over Eurozone break-up risk due to political uncertainty in Italy) and (2) Moody’s GDP growth forecast on Indian economy.
• In a highly volatile trading session, the BSE Sensex fell more than 200 points during the day but managed to recover losses in the last half an hour of trade and close at 34906 down by 43 points, while the NSE Nifty falling 19 points to close at 10,614.
• As mentioned earlier, Credit Rating Agency Moody’s today forecast India’s GDP growth. The rating agency has reduced its India 2018 growth forecast to 7.3% from 7.5% earlier but recalled 2019 GDP growth estimates at 7.5%

31-5-18 (Thursday)

• A superb rally at the Indian Stock Market on May expiry!
• Heavy short covering in the last half an hour of trade; (1) because Brent crude futures fell 0.50% to $77.10 a barrel (due to unexpected growth in US crude inventories and likely increase in crude output from OPEC and non-OPEC members), and (2) easing of political concerns in Italy help the benchmark indices close hire on Thursday, the expiry day of May F&O contracts.
• The BSE Sensex today rose 416 points to close at 35,322 and the NSE Nifty gained 122 points to close at 10,736.
• In the May series, the BSE Sensex gained 1.7% and the NSE Nifty rallied 1.1%

01-6-18 (Friday)

• A day of minor volatility at the Indian Stock Market!
• The Indian Stock Markets witness a minor volatility on the very first day of June series! The benchmark indices today spent most of its time negative territory before ending 100 odd points minus on the Sensex and 40 points on the Nifty.
• The BSE Sensex today fell 95 points to close at 35,227 while the NSE Nifty slipping 40 points to close at 10,696.

Indian Stock Market Weekly Analysis – A Week Gone By

Future Outlook –

Amid higher volatility and May F&O expiry, the benchmark indices able to clock handsome gains and close above 35,200 levels as far as Sensex is concern while the Nifty index closed just below 10,700 levels for the weekends on 1st June 2018.

Some of the events that have happened in the later part of the week could impact the Indian Stock Markets in the next week. These are –

• Lok Sabha by-poll Results: After being failed to form a government in Karnataka, the Bharatiya Janata Party (BJP) suffered a major setback on Thursday after it failed to retain the Bhandara-Gondiya (Maharashtra) and Kairana (UP) Lok Sabha seats. Market expert believes that the state elections which are lined-up may keep Indian Stock Market on the unstable ground till the 2019 general elections.
• PMI Growth In May: Activity in India’s manufacturing sector grew at a weaker pace in the month of May as compared to previous month. Slower expansion in output and domestic demand helped push the Nikkei Manufacturing Purchasing Managers’ Index, down to 51.2 in May from April’s 51.6.

On the technical front, as predicted in the previous article of Indian Stock Market Weekly Analysis the Nifty index is stuck in a range of 10,777 on the higher side and 10,550 on the downside.

With Q4 earning seasons is in its last legs, the market will now closely watch how the monsoon season progress as it already hit Kerala just a few days back. Looking at the current scenario, Finblab believes that the market may witness consolidation and the stock specific action is likely to be there going forward.

Again Nifty may trade 10,550 to 10,850 zone in near term.

Also Read –

1) Finblab’s Valuepick Stock for the month of May – GMM PFAUDLER LIMITED

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