Nifty likely to drift lower in May series amid election uncertainty

Market took a U-turn on D-Street as Sensex and Nifty reversed morning gains and closed below their crucial psychological support levels. The S&P BSE Sensex gave up 39,000 while Nifty50 closed below 11,700 levels on the expiry day.

Volatility was largely on account of monthly expiry in F&O for the April series, mixed earnings, election outcome in May, rise in bond yield, fall in rupee as well as rise in crude oil prices which is trading near 2019 highs.

The final tally – the S&P BSE Sensex was down 323 points to 38,730 while the Nifty50 closed at 11,641, down 84 points.

The Nifty closed lower on Friday but gained 0.61 percent in April series. The new series is likely to remain volatile and bulls would only be able to regain control if Nifty breaks past 11,856 levels on closing basis.

“April was a very slow month as we saw the index moving in a narrow range of 11850-11550 levels. We have made an intermediate top at 11850 levels and there is a higher possibility that the index could drift towards 11300-11200 in May series amid election uncertainty,” Vishal Malkan, Founder Malkans View told Moneycontrol.

Commenting on Bharti Infratel, which was the top Nifty loser, Malkan said that market knows better than us. There is something wrong about the charts as well. In fact, the daily chart has already entered into a bearish zone and weekly charts have also shown a bearish pattern which suggests there is more room on the downside. Investors could look to exit the stock.

Stocks in news:

Shares of Bharti Infratel tumbled 10 percent after reporting flat earnings for the quarter ended March 2019. Global brokerage house CLSA downgraded Bharti Infratel to sell from outperform and also slashed price target to Rs 285 from Rs 300 earlier.

Reliance Industries failed to hold on to record highs and closed the day in red with a loss of over 1 percent. The stock hit a record high of Rs 1410.90 on the BSE.

Maruti Suzuki: Shares of country’s largest passenger vehicle maker Maruti Suzuki India slipped nearly 2% after it reported a 5 percent year-on-year degrowth in March quarter profit, dented by weak operating performance and muted sales volume.

Shares of Titan Company closed flat with a negative bias. Titan hit a record high of Rs 1,164 on the BSE which took its market capitalisation above Rs 1 lakh crore for the first time.

Jaypee Infratech plummeted nearly 5 percent intraday on April 25 after reports emerged that NBCC India has submitted a revised bid to acquire the realty arm of Jaypee Group.

SpiceJet rose higher on news of introducing business class from May 7. The stock closed 4 percent higher.

Global Update:

Asian markets ended mixed with China’s Shanghai Composite falling sharply by 2.43 percent amid worries that Beijing could pull back on stimulus measures. Hong Kong’s Hang Seng fell 0.86 percent.

South Korea’s was down 0.5 percent as economy shrank unexpectedly in the first quarter while Japan’s Nikkei gained half a percent.

European stocks were slightly lower amid corporate earnings. France’s CAC, Germany’s DAX and Britain’s FTSE were down 0.1-0.4 percent at the time of publishing this copy.

Brent oil rose above USD 75 per barrel for the first time in 2019 as quality concerns forced the suspension of some Russian crude exports to Europe.