Volatility comes down, bullish trend remains

It was a new closing high for the benchmark indices Sensex and Nifty-50 on the day of NDA government ministers taking oath and expiry of the future and options in the derivative segment of the market.

After a volatile session Sensex closed at 39,831.97 up by 329.92 points or 0.84 per cent while Nifty-50 closed at 11,945.90, higher by 84.80 points or 0.71 per cent.

However, there was under performance in the broader market with the BSE Mid-Cap index up 0.40 per cent and BSE Small-Cap index up 0.20 per cent only.

The sectoral indices on BSE closed mixed, the gainers included BSE Bankex (0.75 per cent), Telecom (1.21 per cent), Oil & Gas (0.82 per cent) while the losers included BSE Auto(-0.61 per cent) and Metal (-038 per cent).

Among the Sensex constituents twenty stocks closed in the green while ten recorded fall.

The top gainers were NTPC (3.44 per cent), Bharti Airtel (2.33 per cent), Bajaj Finance (2.07 per cent), TCS (1.91 per cent) and Yes Bank(1.88 per cent).

Inflows from foreign investors continue. Foreignportfolio investors were net buyers of equities worth Rs 1664.74 crore while the domestic institutional investors were net sellers by Rs 1122.60 crore, as per provisional data provided by the stock exchanges.

Technical View
Mustafa Nadeem, CEO, Epic Research said, "A bounce back was seen from lower levels as buying emerged and key indices that have higher weight were seen contributing largely in this pullback. It was a day for blue chips that led to recovery which included stocks like HDFC and HDFC Bank, Infosys, TCS, Kotak Mahidra Bank, Reliance Industries and other blue chip stocks. The support placed at 11,850 - 11,860 worked as an inflection point as it was also a previous swing high and further a point of control for bears."

"Amid negative global cues, the relief for traders was the decline in volatility which was up in the last few days. The sudden drop also worked positively for the market. It was an expiry play and now the eyes would be on position built up in June series. The rollover numbers were rather low and lower than their recent monthly average. The Nifty with 59 per cent and the bank Nifty with 71per cent shows much lower rollover for next series," Nadeem said.

Market View
Deepak Jasani, Head of Retail Research, HDFC Securities said, "Markets surged higher on Thursday after weakness seen in the previous session. It was also the derivative expiry of the May series. Technically, with the markets surging higher, the bulls remain in control.”

 Hemang Jani, Head- Advisory, Sharekhan by BNP Paribas, said, "Indian indices ended May F&O expiry on a positive note...Near-term events to be closely tracked are India's Q4FY19 GDP rate, infrastructure output for April, and foreign exchange reserves data... Auto sales data for the month of May to be released on June 1, followed by RBI monetary Policy on June 6."