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Published on 29/05/2020 6:29:49 PM | Source: Emkay Global Financial Services

Perspective on Market Performance for May and Outlook on June by Mr. S Hariharan, Emkay Global

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Below is the Perspective on Market Performance for May and Outlook on June by by Mr. S Hariharan - Head - Sales Trading, Emkay Global Financial Services

“While Nifty is nominally down 2% for the month of May, it is impacted by activity on 30th Apr which formed a disconnected candle on daily charts - excluding which, it ended flat for the month. However, the broader market performed better, with Nifty Next 50 close to reclaiming highs of 30th Apr. Among specific sectors, the second half of the month had Auto, FMCG & Metals sectors driving upside performance - auto names across the board witnessed short covering action, as broader opening up of activity in the country drove expectations of a pick-up in volumes. This month saw the 2 biggest deals in Indian capital markets - Reliance's Rs 530 bn rights issue, and SKB's sale of Rs250 bn worth Hindustan Unilever. Besides these, Rs 75 bn each worth deals in Bharti Airtel & Kotak Mahindra Bank were also subscribed at minor discounts. Each of these met with some overhang post the deals and ended up under-performing the market. For the coming month, any escalation in US-China geopolitical tensions can act as the biggest risk to a continued rally, as passive fund flows have been supportive for EMs broadly. Absent any geopolitical flare-ups, we could see a rotation of flows into Financials and second-rung Consumer stocks in the coming month, as wider opening up of the economy helps sentiment. Stocks facing the rural and agri economy would benefit from progress of a normal monsoon as it impacts progress of Kharif sowing.”

 

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