Markets appears Nervous as India Awaits 2024 Lok Sabha Election Results | Weekly Update 31st May
Hello Readers!
We’re sure everyone is eagerly waiting for the climax of the 2024 Lok Sabha elections. Exit polls have indicated BJP-led NDA win with 350-370 seats a strong positive for the market. However, no one can be sure who will win and how big the win will be until the results are out.
This week had displayed clear nervousness on what will be the election outcome with markets staying volatile throughout the week. But are the markets out of the woods after the exit poll results?
🧾In this Article
📈 Weekly Update
The NIFTY index dropped by 426.4 points to 22,530.7, marking a decline of 1.86%. Volatility ruled the Indian bourses this week and the Indian markets ended in red. The Sensex fell sharply by 1,449.08 points, this week closing at 73,961.31, down 1.92%. The S&P BSE SmallCap and Midcap indices also experienced losses, with the SmallCap dropping 1.17%, and the Midcap falling 1.57% during the week.
Bank Nifty showed resilience, edging up by 12.3 points to 48,983.95, a marginal increase of 0.03%.
Overall, market sentiment was weak during the week. Among the Nifty 50 stocks, only 10 closed the week with gains, while 40 stocks ended the week with losses ranging from 0.9% to 6.7%.
Top Gainers: Divi’s Lab was the top performer of the week, clocking a gain of 4.48%, following closely were Hindalco Industries (2.4%), Bajaj Auto (1.67%), Adani Ports (1.55%) and Indusind Bank (1.42%).
Top Losers: Tech Mahindra faced the steepest decline of the week, dropping by 6.76%, followed closely by ONGC that shed 6.59%. IT major Wipro dropped 5.56% followed by Grasim Industries (4.95%) and Titan (-4.75%).
Sector Spotlight: The Indian stock market witnessed a broad sell-off, with significant declines across major indices with Nifty IT taking the major hit, falling 4.25% during the week followed by Nifty Energy (-3.31%), Nifty FMCG (-2.42%), Nifty Metal 2.06%, Nifty Auto (-1.97%) and Nifty Pharma (-1.69%). Nifty Media and Nifty Realty recorded smaller losses of 1.4% and 0.42% while Nifty CPSE also dropped 2.75%.
However, NIFTY PSU Band and Bank Nifty bucked the trend, clocking marginal eekly gains of 0.37% and 0.03%, respectively.
FII and DII Activity: During the week domestic institutions continued their buying spree and turned net buyers of Indian equity to the tune of ₹14,935 crore. DIIs were net buyers on all trading days of the week. On the contrary FIIs were cautious and were the net sellers during the week. They offloaded Indian equities were ₹7,754.4 crore.
During the month of May 2024 FIIs sold Indian equities worth ₹42,214.28 crores, whereas domestic institutions made a total net purchase of ₹55,733.04 crores. Are domestic institutions anticipating a BJP-led NDA win?
Global Gossip: In a mixed week for global markets, the U.S. indices showed varied performances. The Dow Jones surged by 1.51% to close at 38,686.32, driven by gains in several blue-chip stocks. The S&P 500 also experienced a positive uptick, rising by 0.80% to 5,277.51. Conversely, the Nasdaq remained virtually unchanged with a slight decline of 0.01%, closing at 16,735.02 after hitting a high of 16,789.27 and a low of 16,445.54.
European and Asian markets also displayed a blend of gains and losses. The FTSE in London climbed 0.54% to 8,275.38, while France’s CAC edged up 0.18% to 7,992.87, and Germany’s DAX remained stable with a marginal increase of 0.01% to 18,497.94. In Asia, Japan’s Nikkei 225 advanced by 1.13% to 38,487.90, showcasing strong performance within the region. However, the Hang Seng Index in Hong Kong fell by 0.83% to 18,079.61, and China’s Shanghai Composite dipped slightly by 0.16% to 3,086.81, reflecting investor caution and market volatility.
Rupee Report: The rupee experienced a steep loss of 20 paise, settling at 83.49 (provisional) against the US dollar on Friday amid volatile domestic equity markets and continued foreign fund outflows. Increased month-end demand for the greenback by oil marketing companies further pressured the currency, despite some support from lower crude oil prices. The rupee opened at 83.25, fluctuated between a high of 83.23 and a low of 83.49, before closing at 83.49, down from Thursday’s close of 83.29.
🍟 Quick Bites
- 📈 India’s GDP growth surpasses estimates at 7.8% in Q4; FY24 tops 8%
- 🌟 The RBI reported a record high as India’s forex reserves surged by ₹4,540 crores to reach ₹6,48,700 crores
- ☕ India’s coffee exports surged 12.22% year-on-year, totaling ₹10,496 crores.
- 💥 The RBI boosted its gold reserves by adding 24 tonnes to its forex reserves from January to April.
- 💰 India’s net FDI dropped sharply by 62.17% to $10.58 billion in FY24, hitting its lowest level since 2007.
- 💢 India’s Purchasing Managers’ Index (PMI) dipped to 58.4 in May, while the Services PMI climbed to 61.4, according to HSBC India Flash PMI data.
- 💫 RBI approves a massive dividend, sanctioning a payment of ₹2.11 lakh crores to the Central Government for the fiscal year 2023-24.
- 📉 Paper imports surge as India’s paper and paperboard imports jump 34% to 19.3 lakh tonnes in 2023-24..
- ❄️ NSDC and ILO forge a partnership to collaborate on enhancing skill development and lifelong learning initiatives.
- ⚡ Home voting is extended nationwide, providing eligible voters with the option to participate in the General Elections 2024 from the comfort of their homes.
- ✨ GDP growth surpassed estimates, reaching 7.8% in Q4, with the full fiscal year 2023-24 topping 8%.
📰 Stocks in News
- 🏦 Alembic Pharma receives approval from the US FDA for its heart failure treatment drug.
- 🏗️ IDFC First Bank approves a preferential issue of shares worth ₹3,200 crores.
- 🤝 Bata India reports a slight 1.07% decrease in net profit to ₹66.58 crores, with a dividend declared at ₹12 per share.
- 📶 JIO Financial launches the beta version of its ‘JIO Finance’ app, offering services like UPI, digital banking, and mutual fund loans.
- 💼 Bharat Dynamics reports an impressive 88.79% increase in net profit to ₹288.72 crores, with a dividend declared at ₹0.85 per share.
- ⌚ Competition Commission of India approves demerger of ‘ITC Hotels’ from ‘ITC Ltd’. ITC Hotels to be listed as new stock.
- 🔥 IIFL Finance subsidiary IIFL Samasta Finance to raise ₹1,000 cr through bond sales to refinance debts and expand lending activities.
- 🔌 Alkem Laboratories reports a 350% increase in net profit to ₹304.48 crores. Dividend declared ₹5 per share.
- 💫 Mazagon Dock reports a 103.24% increase in net profit to ₹662.97 Cr. Dividend declared ₹12.11 per share.
- 🎖️ IRCTC reports a 1.93% increase in net profit to ₹284.04 cr. Dividend declared ₹4 per share.
- 📉 Emami reports a 3.62% increase in net profit to ₹146.75 cr.
- 📁 Prestige Estates reports a 53.32% decrease in net profit to ₹235.90 crores. Dividend declared: ₹1.8 per share. Board approves issuance of NCDs worth ₹2,000 crores.
- 🎓 Brigade Enterprises reports a 234.22% increase in net profit to ₹210.86 crores. Dividend declared: ₹2 per share.
- 🏢 Samvardhan Motherson reports a 106.55% increase in net profit to ₹1,444 crores in Jan-March quarter. Dividend announced ₹0.80 per share. Company to raise ₹5,000 crores through private placement of NCDs.
🌱 Sustainability Corner:
- 🍏 HPCL and MG Motor India to collaborate on setting up EV charging stations across India.
- 🌼 Suzlon Group secures 551.25 MW wind power project order from Aditya Birla Group in Rajasthan and Gujarat.
- 🌿 NSE launches India’s first Electric Vehicle Index.
- 🌿 Jupiter Wagons’subsidiary Jupiter Electric Mobility receives approval from The Automotive Research Association of India (ARAI) to commence the commercial production of its innovative battery-operated light commercial vehicles under the brand name JEM TEZ.
🚀 IPO Corner:
IPO News
- 🏍️ HeroFincorp, the financial arm of Hero MotoCorp plans to file its ₹5,000 crore IPO’s DRHP. If all goes well, it will be the largest ever public issue by a non-banking financial company.
- Ackman’s Pershing Square plans to raising ₹8,200 crores via IPO.
- Canara Bank starts IPO process to take Canara HSBC Life public.
- 💼 Oravel Stays Withdraws IPO Application: Parent Company of Oyo Hotels Scraps Plans
Listings:
- Hariom Atta & Spices (HOAC Foods India) had a strong market debut with shares opening at ₹147 on NSE SME, a premium of 206% over the issue price.
- Awfis Space Solutions had a modest listing on 30th May 2024, listing at ₹435 per share, a premium of 13.58% over the issue price of ₹383.
- Vilas Transcore Limited IPO (SME) to list on June 3, 2024.
- Ztech India Limited IPO and Beacon Trusteeship Limited IPO (SME) to list on June 4, 2024.
IPOs Next Week:
- TBI Corn IPO opened for subscription on Friday, May 31, and will close on Tuesday, June 4. The issue’s price band has been fixed in the range of ₹90 to ₹94 per share. The TBI Corn IPO lot size is 1,200 shares.
- Sattrix Information Security Limited (SME) – June 5th – 7th
- TBI Corn Limited (SME) May 31st – June 4th
- Aimtron Electronics Limited (SME) May 30th – June 3rd
The D-Day Arrives: Exit Poll Indicated NDA win but markets showed nervousness during the week
June 4th – the day everyone is waiting for when the election results will be out. Will BJP win with majority? Is there someone who could defeat the BJP? What will happen to markets?
Exit polls on Sunday indicate that the BJP-led India is likely to secure 350-370 seats in the elections, which will bode well for the markets. Markets are expected to open positive next week on strong BJP win indication. However, profit taking may follow the recent rally.
Keep an eye on sectors like defense, railways, manufacturing, and financials—they’re likely to thrive. Diversified companies could also shine. Consider booking profits at current highs and await a potential dip for re-entry. Long-term prospects remain optimistic, but short-term consolidation is expected as we await details from the July budget. 🚀📈
Upcoming key financial events for the week:
| Date | Event |
| 03-Jun-24 |
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| 04-Jun-24 |
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| 05-Jun-24 |
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| 06-Jun-24
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| 07-Jun-24 |
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