The next major trigger for the stock market is the outcome of the upcoming Lok Sabha elections. Lok Sabha elections will be held between 7 April 2014 to 12 May 2014 in nine phases. The counting of votes will take place on 16 May 2014. The term of the current Lok Sabha expires on June 1 and the new House has to be constituted by May 31. The Federal Open Market Committee (FOMC) next undertakes monetary policy review at a two-day meeting on 29-30 April 2014.
Technical Outlook for CNX Nifty
It was a phenomenal month for the benchmark index Nifty, as it gained nearly 7% percent and closed above the psychological mark of 6700. Except IT and Pharma, almost all the sectoral indices participated in the rally. Undoubtedly, it closed on firm note but as we are now entering in phase of general election so volatility would be the key issue to handle. Considering the scenario ahead, it’s advisable to maintain stock specific approach with strict risk management rules to avoid any unmanageable loss which may occur due to choppiness.
The March expiry has gained by 6.5% higher closing at the high point of the current expiry month. Total rollover was at 79% (6m-avg 79%) while Nifty rollover was below averages at 54% (6m-avg 62%). The April futures traded at a premium of 34-38 points between the two months.
The sectors witnessing strong roll overs are Banking, NBFC, Media and Textiles sectors while weak rollovers were in Capital Goods, Fertilizers, Oil-Gas, and Telecom sectors. Among the individual stock with high roll overs were UPL, MecloedRussel, Hindzinc and Titan while stocks like GSK Consumer, Just dial, IOB and ITC had weak rollovers.