Derivatives Market Ends April Series on a High Note
The derivatives market ended the April series on a positive note, with the Nifty and Bank Nifty gaining 1% and 2.9%, respectively. The month saw volatility, with record highs followed by a sharp correction and subsequent recovery.
Metals, realty, and PSU Banks were the top performers, while IT underperformed.
May Series Outlook
The ongoing Q4 earnings season and the US Fed rate decision on May 1st will influence the market sentiment in May. Towards the end of the month, the focus will shift to the general elections.
US Fed and Bond Yields
The US Fed is expected to keep interest rates on hold till September. The 10-year bond yields in the US are at their highest levels since November 2023.
Indian Derivatives Market Focus
Bank stocks and the underperforming IT sector are likely to be in focus in the May series.
Trading Holidays in May Series
Equity markets will be closed on May 1st and May 20th due to Maharashtra Day and Lok Sabha elections in Mumbai.
Cues from F&O Rollover to May Series
Nifty futures rollovers are lower at 65% compared to 77% in the last three series. Meaningful long-side OI addition is seen in consumption, energy, realty, FMCG, and banks.
FII and HNI Activity
FIIs have added fresh shorts in index futures, while HNIs have increased their net longs in single-stock futures to historic highs.
Market Expectation for May Series
The Nifty is expected to consolidate in the 22,350 - 22,700 range before reaching new all-time highs in May.
Top Picks for May Series
Auto and chemicals are the preferred sectors, with Eicher Motors, Mahindra & Mahindra, Maruti, ITC, Hindustan Aeronautics, and NMDC being potential outperformers.