Domestic equity benchmarks Sensex and Nifty 50 settled with mild gains on Friday, May 31, snapping the losing streak of the last five consecutive sessions on value-buying as investors turned their focus on exit polls to be released after the close of the last phase of elections on June 1.
The frontline indices had fallen for five straight sessions until Thursday and are down 2.4 per cent from an all-time high hit early this week amid high volatility ahead of the Lok Sabha poll results. On a weekly basis, Sensex tanked 1,449 points while Nifty plunged by 426 points, recording their first weekly decline in three, as traders made positional adjustments ahead of exit polls and results.
Strong capital outflows by foreign investors, mixed global cues, dwindling hopes of rate cuts, and concerns over geopolitical tensions have been weighing on market sentiment lately. On the macroeconomic front, government data revealed on Friday that India has retained its crown as the world’s fastest-growing major economy in FY24. India’s FY24 gross domestic product (GDP) grew by 8.2 per cent, while January-March quarter GDP moderated to 7.8 per cent.
In its derivatives monthly rollover report, domestic brokerage firm Religare Broking revealed that Nifty 50 closed at around 22,500 after volume-weighted average price (VWAP)-based selling activity was witnessed in the second half of the day.
In its report, Religare highlighted that at 95 per cent, banking, cement and oil & gas are the sectors where the highest rollover was witnessed in the May series. Whereas at 80 per cent, is the sector where the lowest rollover was witnessed.
Nifty, Bank Nifty derivates summary
Nifty futures has rolled at around 72 per cent compared to 65 per cent which is slightly higher with respect to the previous series. The Open Interest (OI) for the new contract is higher by around 20 lakhs with respect to the last month contract implying more short positions.
Bank Nifty futures rolled at 68 per cent compared to 74 per cent, lower than the previous month. Bank Nifty futures have seen anaddition of OI of around 5.6 lakh with respect to the last month. This might be because of the higher positions in Bank Nifty during the May expiry.
Which stocks to invest in June series as per Religare Broking?
Bata India, Indraprastha Gas Ltd (IGL), UPL, and United Breweries Ltd (UBL) are the top picks for the May series, according to Religare Broking.
IGL(CMP : 447):
The stock has broadly been consolidating and gained hardly anything in the May series. ‘’But the noticeable part is it added substantial OI to the tune of 32 per cent with rolls at 93 per cent. Going forward, we believe stock may come out of the range and test 490 in the near term,” said the brokerage.
Bata India(CMP : 1,392):
After a prolonged downtrend, the stock is now showing some signs of reversal. In the previous month, it gained nearly two per cent with an addition of 16 per cent OI with 92 per cent of positions being rolled. ‘’Holding 1,330, we believe the stock has the potential to test 1470-1500 levels in the near term,” said Religare Broking.
UBL(CMP : 1,842):
The stock witnessed some pullback and lost nearly nine per cent with a decline of 39 per cent OI in the May series. Rollovers were less indicating this short term downtrend may be about to end. ‘’So keeping a stop at 1,750, we expect the stock to see some positivity in the near term,” said the brokerage.
UPL( CMP : 508):
The stock ended on a flattish note i.e. hardly any change in price. Some decline of OI was seen to the tune of 12 per cent. Existing positions have been rolled at 96 per cent. ‘’The stock has been stabilizing around current levels, going forward we believe it may start moving higher. One…
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