Week Ahead:- Experts predict an upbeat market mood with high volatility as the market approaches exit polls and general election results.
The Indian market experienced a strong week ending on May 24, with benchmark indices reaching new all-time highs. The rally was fueled by better-than-expected March quarter earnings, easing in FII selling, consistent buying by DIIs, RBI’s dividend payout, and healthy domestic macro data. Experts expect a positive mood with high volatility as the market approaches exit polls and general elections results. The Nifty 50 and BSE Sensex also saw gains.
Key factors for upcoming week
Corporate Earnings
The March quarter earnings season is nearing its end, with over 2,100 companies releasing their results. Notable companies include Tata Steel, Life Insurance Corporation of India, Astrazeneca Pharma, Natco Pharma, NMDC, Aditya Birla Fashion and Retail, Amara Raja Energy & Mobility, Aster DM Healthcare, Engineers India, Exicom Tele-Systems.
Lok Sabha Elections
The Lok Sabha elections will move to the seventh phase on June 1, 2024, followed by exit poll results. Voting will take place in 57 constituencies across eight states. The lowest voter turnout recorded in the sixth phase was 59.46 percent, with the lowest in the elections thus far.
Domestic Economic Data
Market participants are closely monitoring the country’s economic performance, with GDP numbers due on May 31. Economists expect a lower Q4FY24 GDP than Q3FY24, and a 7.6% growth for 2024. Other key announcements include fiscal deficit numbers, infrastructure output, bank loan and deposit growth, and foreign exchange reserves.
Auto Sales
The next thing to watch for would be the auto sales data for May 2024, due in the initial days of next month, starting June 1, when all the auto companies, including Tata Motors, Hero MotoCorp, Maruti Suzuki India, Bajaj Auto, Mahindra & Mahindra, and Escorts will release their sales figures.
Global Economic Data
The second estimates of US GDP growth for Q1 2024, due on May 30, are expected to reveal a 1.6% growth, compared to the previous quarter’s 3.4%. The release also includes PCE prices and real consumer spending estimates.
FID/DII Flow
Foreign institutional investors (FIIs) in India have slowed down their selling, becoming net buyers for the first time in a truncated week ending May 24. Experts predict FIIs may become big buyers in the coming days if policy continuation after the general election results. Domestic institutional investors continued to offset FII selling, buying Rs 6,978 crore worth of shares.
IPO
The primary market will not see any new issues next week, with the Awfis Space Solutions IPO closing on May 27 and listing on May 30. However, five SME companies will launch their IPOs on Dalal Street, including Vilas Transcore, Beacon Trusteeship, Ztech India, Aimtron Electronics, and TBI Corn.
Technical View
Technical indicators suggest a continuation of positive sentiment on Dalal Street next week. The Nifty 50 is expected to hit the upper band of the rising channel at 23,100-23,200, with key support at 22,800-22,700 levels. The market’s buoyancy has countered previous bearish sentiment.
FO Cues
Monthly options data indicates that the 23,000 level is expected to significantly influence the Nifty’s direction in the F&O expiry week. Put writing was observed at the 23,000 strike, challenging call writers. If this holds, 23,500 could be seen in the June series, with major support at 22,500. Volatility is expected to remain high as the market approaches Lok Sabha election results.
Corporate Action
Shares of as much as 16 companies will trade ex-dividend next week. These companies include Anupam Rasayan India, Sula Vineyards, Tata Coffee, HDFC, HDFC Bank, Sundram Fasteners, Foseco India, Man Infraconstruction, Advanced Enzyme Technologies, Colgate-Palmolive, Home First Finance Company India, JM Financial, Rain Industries, and Tata Consumer Products.
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