Published on 2/06/2020 10:42:39 AM | Source: Religare Broking Ltd

Markets started the week on a firm note and gained nearly 2.5%, taking note of favorable cues - Religare Broking

Posted in Market Outlook| #Market Outlook #Religare Broking Ltd

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Nifty Outlook

Markets started the week on a firm note and gained nearly 2.5%, taking note of favorable cues. The announcement of gradual easing of lockdown boosted the sentiment which further strengthened with the buoyancy in the global markets. Besides, the news of the timely arrival of monsoon also aided the surge. Mostly sectoral indices participated in the move with noticeable buying interest on the broader front which gained nearly 3% each.

The recent surge indicates that markets are focusing more on the optimistic side and anticipating a favorable scenario. We suggest maintaining a positive yet cautious approach as Nifty has again reached closer to the next resistance zone of 9,950-10,050. Besides, the continuous spikes in the COVID-19 cases and subdue earnings may cap the upside ahead. On the global front, further deterioration in the US-China relations is another important factor that could unsettle the markets. In short, traders should use a further surge to liquidate aggressive longs around the hurdle and wait for any dip to re-enter.


Stock In News

* M&M reported its volume numbers for May 2020 wherein its total sales volume was down 79% YoY at 9560 units. On the segment front, PV declined 81% and CV were down 71% YoY in May 2020.

* Maruti Suzuki posted total sales of 18,539 units in May 2020 including 13,865 units in Domestic market and sales of 23 units to other OEM.

* Escorts sold 6,454 tractors in the domestic market in the month of May which was down 0.5% YoY. The overall sales were down 3.4% YoY to 6,594 units.


Investment Pick

* Crompton Greaves Consumer Electricals (CGCE) reported weak set of numbers in Q4FY20 due to nationwide lockdown.

* We continue to remain constructive on CGCE’s growth prospects given its strong product portfolio, market leadership and increased focus on premiumization office portfolio. Further, its lean working capital cycle, strong cash flow generation and robust return ratios. Make it one of the preferred picks in the sector.


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