OVERVIEW OF MARKET
Nifty was resilient during the month of May closing largely flat despite rising crude prices and political uncertainty after the Karnataka elections. On a positive note, the IMD has predicted a normal southwest monsoon and quarterly earnings excluding corpoarte banks saw an inflection . Crude price touched $80 during the month but closed lower at $77.5 as Saudi Arabia and Russia agreed to raise oil production. Further, Banking and FMCG sectors’ outperformed while Pharma, Auto and Infra underperformed the Nifty for the month. FIIs sold approximately Rs 10,060 cr (as per NSDL), while domestic mutual funds bought around Rs 13,574 cr of equity during the month.
On the economy front, 4QFY18 GDP growth surged to 7.7% leading to FY2018 growth of 6.7%. The Index of Industrial Production fell to 4.4% in March compared to 7.1% in February. CPI inflation rose to 4.6% in April against 4.3% in March. WPI inflation rose sharply to 3.2% in April as against 2.5% in March.
The Bond yield rose during the month of May 2018. The benchmark 10 year G-Sec (7.17% GOI 2028) closed at 6bp higher at 7.83% against 7.77% last month.