May 15th 2024 Stock Market analysis

Market Wrap: Sensex Drops 118 Points, Nifty Steady at 22,200; BSE MidCap Rises 0.6%, SmallCap Up 1%

Indian markets closed marginally lower on May 15, with the Sensex dropping 118 points while the Nifty held steady at 22,200 ahead of crucial US inflation data that could impact the Federal Reserve's rate decisions. In contrast, broader markets saw gains, with the BSE MidCap up 0.6% and the SmallCap up 1%.

The Sensex closed at 72,987 points, down 0.08%, while the Nifty held at 22,200 points. Among sectoral indices, the Nifty PSU Bank Index led the gainers, rising 1.4%, followed by gains in the Nifty Realty and oil & gas indices, each up 1%. The Nifty FMCG Index was the top loser, down 1%, with the Nifty auto index down 0.5%. The Nifty Bank and Nifty Private Bank indices both slipped 0.3%.

The US producer price index for April exceeded expectations, which tempered speculations of rate cuts despite a cautious initial market reaction due to the downward revision in March wholesale prices. Attention is now focused on the US CPI inflation numbers for April, set to be released later on Wednesday.

Federal Reserve Chair Jerome Powell, speaking at the Foreign Bankers’ Association meeting in Amsterdam, reaffirmed that inflation is slowing more gradually than anticipated, prompting the Fed to maintain its current policy stance for an extended period. He acknowledged the unexpected inflation readings and signaled a patient approach, anticipating that inflation will ease gradually but ruling out near-term rate hikes.

Technical Outlook on 16th May

Nifty may expect an immediate support near 22128 then 22056 and resistances are 22272 then 22344. Now the nifty is looking at a mixed trade.

Bank Nifty may expect an immediate support near 47476 then 47265 and resistances are  47898 then 48109. Now the bank nifty is looking at a mixed trade.‍

Derivative Outlook on 16th May‍

PCR Analysis: Nifty PCR-OI has decreased with nifty has negative which shows CALL WRITING.

Open Interest Analysis: Nifty future MAY contract OI has decreased with negative close which shows Long Unwinding.

Cost of Carry Analysis: Nifty MAY month contract has ended in high compare with JUNE contract and flat range compare with previous session which indicates a mixed trade.

India VIX Analysis: India VIX has closed at 20.27 vs 20.20 (DoD) basis which shows increase in volatility.‍

M&M Reaches Record High Ahead of Q4 Results; Stock Surges 32% in 2024‍

Shares of Mahindra and Mahindra Ltd (M&M) gained 1.5 percent, reaching an all-time high of Rs 2,306 apiece on May 15, just one day before the auto major is set to announce its January-March quarter (Q4FY24) results. Recently, M&M's wholly-owned subsidiary, Mahindra Holdings, executed a share purchase agreement to sell its entire 30.8 percent stake in the New Delhi Centre for Sight (NDCFS) to Space Investments, Defati Investments Holding BV, and Infinity Partners for Rs 425.4 crore. NDCFS is an associate company and a joint venture between Mahindra Holdings and M&M under the Companies Act.

Additionally, M&M signed a memorandum of understanding (MoU) with the Ministry of Skill Development and Entrepreneurship (MSDE) to conduct two pilot projects under the 'Drone Didi Yojana.' This initiative aims to train 15,000 women to operate drones for various agricultural purposes, such as fertilising crops, monitoring crop growth, and planting seeds. Mahindra Group will provide initial set-up support, including simulation machinery or drones, simulator controllers, desktop computers, trainers, and cover the operating costs for the duration of the pilot projects.

This year, M&M's stock has surged over 32 percent, significantly outperforming the 2 percent rise in the benchmark Nifty 50 index.

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