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Last Updated : Jun 03, 2019 07:17 AM IST | Source: Moneycontrol.com

A morning walk down Dalal Street: Selling pressure possible if Nifty fails to hold 11,858

The lowest quarterly GDP growth rate since 2014-15 highlights the challenges newly appointed Finance Minister Nirmala Sitharaman would face

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It was a roller coaster ride for traders as the month of May started muted with nine straight consecutive sessions of fall but then bulls took control in the last 10 days to push Nifty towards a record high of 12,041.

Rollovers in derivatives for June series were slightly better than the previous few months indicating the return of confidence among the investor community.

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For the month, Nifty rose 1.48 percent while Sensex rallied 1.7 percent in the same period.

Benchmark indices might have registered minor gains but the big move was seen in the broader market. As many as 80 stocks in the S&P BSE 500 index rose 10-30 percent in May including Inox Wind, Can Fin Homes, BEML, Ujjivan Financial, SpiceJet, Bajaj Finance, SBI, Birla Corporation, PNB Housing and Edelweiss Financial Services.

The Union Budget will be presented on July 5, I&B Minister Prakash Javadekar announced at a press briefing after the first Cabinet meeting concluded on May 31.

Snapping its three-session losing streak, the rupee on May 31 rose 17 paise to close at 69.70 against the US dollar on weakening of the greenback in overseas markets and easing crude oil prices. On a weekly basis, the rupee declined 34 paise.

On the institutional front, FPI were net buyers in Indian markets for Rs 676 crore while the DIIs were also net buyers for Rs 394 crore, provisional data showed.

Big news:

India's gross domestic product (GDP) grew 5.8 percent in January-March, official data released on May 31 showed, confirming fears of a slowdown, as the new government assumed office amid expectations of a wide-ranging policy impetus to turnaround the economy that is nursing multiple pain points.

The growth in GDP was slowest since 2014-15.

The figures highlight the challenges newly appointed Finance Minister Nirmala Sitharaman would face.

Some good news:

India’s infrastructure output grew 2.6 percent in April from a year earlier, government data showed on May 31.

Infrastructure output, which comprises eight sectors such as coal, crude oil and electricity, accounts for nearly 40 percent of India’s industrial output.

The fiscal deficit for 2018-19 came in at 3.39 percent of GDP, marginally lower than 3.4 percent estimated in the revised estimates of the Budget, mainly due to an increase in non-tax revenue and lower expenditure.

Technical view:

Nifty formed a bearish candle with long lower shadow on the daily scale while small bullish candle on the weekly scale. During the week, the index gained 0.66 percent.

The market consolidated between 11,800 and 12,041 and requires a decisive breakout on the higher side to extend its gains, suggest experts.

If the index fails to hold above 11,858-11,900 on a closing basis, then further selling pressure could be possible.

Three levels: 11830, 11858, 12041

Max Call OI: 12500, 12000

Max Put OI: 11500, 11700

Stocks in news:

The country's largest carmaker Maruti Suzuki India on June 1 reported a 22 percent decline in sales at 1,34,641 units in May. The company had sold 1,72,512 units in May 2018, Maruti Suzuki said in a statement.

Auto major Mahindra and Mahindra on May 31 reported 3 percent decline in total sales at 45,421 units in May. The company had sold 46,848 units in the same month last year, M&M said in a statement.

Suzlon Energy's consolidated net loss for the March quarter narrowed to Rs 294.64 crore from Rs 469.85 crore a year ago, mainly due to lower expenses.

Technical recommendations:

We spoke to Angel Broking and here's what they have to recommend:

Godrej Consumer: Buy| LTP: Rs 688.05| Target: Rs 760| Stop loss: Rs 648| Upside: 10 percent

Raymond: Buy| LTP: Rs 828| Target: Rs 897| Stop loss: Rs 804| Upside: 8 percent

Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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First Published on Jun 3, 2019 07:17 am
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