New Delhi: Markets Experience Significant Gains Amid Eventful Week
The markets experienced substantial movement and notable developments in the past week. An anticipated holiday on Thursday, originally declared for Buddha Purnima, was cancelled by the exchanges on Monday. The decision aimed to prevent a disruption in market momentum due to two holidays within the same week.
Thursday emerged as a pivotal day for the markets, with the BSESENSEX surging by 1,197 points and the NIFTY by 370 points, both reaching new lifetime highs. This surge was bolstered by the Reserve Bank of India’s announcement of a Rs 2.1 lakh crore dividend for the fiscal year ending March 2024, which helped maintain the government’s targeted fiscal deficit.
Over the four-day trading week, the BSESENSEX experienced gains in two sessions and losses in two, while the NIFTY saw gains in three sessions and a loss in one. The BSESENSEX closed at 75,410.39 points, marking an increase of 1,404.45 points or 1.90%, and the NIFTY closed at 22,957.10 points, up by 455.10 points or 2.02%.
Broader market indices also recorded gains: BSE100, BSE200, and BSE500 rose by 1.87%, 1.87%, and 1.65%, respectively. The BSEMIDCAP increased by 1.10%, and the BSESMALLCAP edged up by 0.08%. New intraday highs were set on Friday at 75,499.91 points for BSESENSEX and 23,026.40 points for NIFTY.
The Indian Rupee strengthened by 24 paise or 0.29%, closing at Rs 83.10 against the US Dollar. In contrast, the Dow Jones faced selling pressure, losing 934 points or 2.33%, closing at 39,069.59 points over three of the five trading sessions.
Go Digit General Insurance Limited marked a notable new mainboard listing last week. Issued at Rs 272, the shares opened at Rs 281.10 on the BSE on Thursday, May 23. The shares closed at Rs 305.75 on the first day, reflecting a gain of Rs 33.75 or 12.40%. By Friday, the share price settled at Rs 300.15, representing a reduced gain of Rs 28.15 or 10.35% since listing.
Awfis Space Solutions Limited’s issue is currently ongoing, featuring a fresh issue worth Rs 128 crore and an offer for sale of 1,22,95,699 equity shares within a price band of Rs 364-383. The company specializes in providing shared workspaces. Despite reporting a net loss in its restated accounts, the company is expected to show positive numbers by the end of March 2025, with 75% of its space already rented out.
The issue, which opened on Wednesday, May 22, and will close on Monday, May 27, has seen substantial interest, being subscribed 11.4 times overall. The QIB portion was subscribed 3.39 times, the HNI portion 20.98 times, and the Retail portion 21.08 times. Investors with a medium-term outlook may find this a rewarding opportunity if their application is successful.
Looking ahead, the expiration of May futures on Thursday, May 30, will be noteworthy. The current NIFTY value of 22,957.10 points is up by 386.75 points or 1.71% from the May series opening of 22,570.35 points, with all gains realized in the past week. While the momentum currently favors the bulls, caution is advised as market movements may react to upcoming election results.
The sixth phase of voting has concluded, with the final phase set for Saturday, June 1. Markets have rallied sharply over the past two weeks, reaching new lifetime highs, and indicating confidence in a BJP-led NDA government. Exit poll analyses will commence on Saturday evening, continuing until the official results are announced on Tuesday morning.
The coming week is expected to be volatile, particularly on expiry day, as investors may reduce positions and adopt a cautious stance. Foreign Portfolio Investors (FPIs) have been significant sellers in May, and the excess liquidity managed by domestic institutions may lead to a mismatch on expiry day.
As the week progresses, expect heightened volatility approaching expiry. Election results will likely further impact market volatility post-expiry, with limited positions potentially leading to sharp market movements from Monday to Wednesday in the week of June 3 to June 6. The advised strategy is to reduce positions gradually and avoid significant overweights in either direction. Analyze exit polls carefully before making trading decisions.
Trade cautiously.
