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Equity Research Report: Market Explorer

Key benchmark indices hit new high in April 2014 and Nifty able to cross the level of 6800, but in the recent rally only a few sectors such as IT, FMCG, Pharma, Telecom and Private sector banks have contributed. The earnings so far announced were mix and investors are cautious over the recent rally. At this juncture the outcome of election results on 16 May is the major trigger.
06 May 2014 | 03:15 PM

Market Outlook

 

Key benchmark indices hit new high in April 2014 and Nifty able to cross the level of 6800, but in the recent rally only a few sectors such as IT, FMCG, Pharma, Telecom and Private sector banks have contributed. The earnings so far announced were mix and investors are cautious over the recent rally. At this juncture the outcome of election results on 16 May is the major trigger.

 

Technical Outlook for CNX Nifty

 

After the exceptional move in March month, Nifty was seen trading within a range of 6650-6870 zone for the entire month in April and closed flat in the end. Now, we are in the month of general election results so undoubtedly volatility will tend to remain on higher side. And, ongoing earning season will add to it so one should be extra cautious this month. However, technical chart of index is favoring bullish bias to prevail with some intermediate profit taking or consolidation in between so trade accordingly.

 

Rollover Synopsis

 

The April expiry ended finally with gains of 2.9% with a  volatile trading month swinging between 6700 to 6850  levels during the whole month. Total rollover of 78% (6m-avg 80%) and Nifty rollover was at 64% (6m-avg 63%).  The May futures was trading at a premium of 50-54 points between the two months, but sheds the premium on the first trading day of the new derivatives expiry.

The sectors witnessing strong roll overs are Banks, Capital Goods, Metals and Telecom sectors while weak rollovers were in FMCG, Pharma and Power sectors. Among the individual stock with high roll overs were JSW Steel, UPL, UCO Bank and Aurobindo Pharma while stocks like Rec Ltd, Glaxo Consumer, Havells, M&M and Petronet had weak rollovers.