Tata Mutual Fund

Market Commentary

  • Request a callback
    Please fill the details below & we will get in touch with you
    Fields with * marks are mandatory
    Name *

    Mobile No *

    Landline No -

    City *

    Thank You!

    We will get back to you soon.

Equity Market

Equity Commentary - May 2019

Indian equity markets were positive for the month of May 2019 with the Sensex up by 1.7%, and the Nifty by 1.5%. The broader market; the BSE Midcap & the BSE 200 were up with a performance of 1.4% each. In terms of sectors; Banks, Capital Goods, Consumer Durables, Oil & Gas, Realty and Power were the major outperformers whilst all other sectors underperformed the BSE Sensex. FIIs were net buyers in May, with net inflows to the tune of ~USD 1.3 bn. Net equity buying in April by domestic MFs in the market were ~(USD 0.7 bn).

Index Name As on As on As on Return in %
31-May-19 30-Apr-19
31-May-18 1 Month 1 Year

Nifty 50 Index

11923

11748

10736

1.5

11.1

S&P BSE Sensex

39714

39032

35322

1.7

12.4

S&P BSE MID CAP

15096 

14889 

16014 

1.4

-5.7

S&P BSE SMALL CAP

14867 

14625 

17249 

1.7

-13.8

S&P BSE 200

4987 

4915 

4654 

1.4

7.1

S&P BSE AUTO

18446 

18839 

24472 

-2.1

-24.6 

S&P BSE Bankex

35264  

33328  

30007 

5.8 

17.5 

S&P BSE Consumer Durable

24700

23874 

20670 

3.5 

19.5 

S&P BSE Capital Good

19939  

18031 

18822 

 10.6

5.9 

S&P BSE FMCG

11518

11764 

11291 

-2.1 

2.0 

S&P BSE Health Care

13305

14367 

13003 

-7.4 

2.3 

S&P BSE IT

15782

16264 

13453 

-3.0 

17.3 

S&P BSE METAL

10756 

11513 

13612 

-6.6 

-21.0 

S&P BSE Oil & Gas

15734 

15358 

14429 

2.5 

9.0 

S&P BSE Power Index

2010 

1970 

2129

2.1 

-5.6 

S&P BSE Realty

2201 

2009 

2235 

9.6 

-1.5 



Index Name As on As on As on Return in %
31-May-19 30-Apr-19
31-May-18  1 Month 1 Year

Nifty 200

6178 

6093

5773 

1.4 

7.0 

Nifty 50

11923 

11748 

10736 

1.5 

11.1 

Nifty Auto

8176 

8351 

10994 

-2.1 

-25.6 

Nifty Bank

31375 

29765 

26956 

5.4 

16.4 

Nifty Commodities

3685 

3688 

3685 

-0.1 

0.0 

Nifty Energy

16560 

16500 

13523 

0.4

22.5 

Nifty Financial Services

13480 

12555 

11132 

7.4 

21.1 

Nifty FMCG

29850 

30337 

28814 

-1.6 

3.6 

Nifty India Consumption

4809

4814 

5042 

-0.1 

-4.6 

Nifty Infrastructure

3339 

3108 

3336 

7.4 

0.1 

Nifty IT

16161

16705

13666

-3.3

18.3

Nifty Metal

2900 

3089 

3594 

-6.1 

-19.3 

Nifty Midcap 100

17959 

17566 

18903 

2.2

-5.0 

Nifty Pharma

8455 

9403 

8220 

-10.1

 2.9

Nifty Realty

284 

258 

295 

9.9 

-3.7 

Nifty Smallcap 100

6548 

6468 

7830 

1.2 

-16.4 


The Macro Picture

  May 2019 April 2019
WPI 3.07% (April 2019) 3.18% (March 2019)
CPI 2.92% (April 2019) 2.86% (March 2019)
Index of Industrial Production -0.07% (March 2019) 0.08% (February 2019)
Repo rate 6.0% (as on May 31, 2019)  6.0% (as on April 30, 2019)  
Marginal Standing Facility Rate 6.25% (as on May 31, 2019)   6.25% (as on April 30, 2019)  
Source: RBI, MOSPI

Inflation

India’s Wholesale Price Inflation (WPI) Index came in at 3.07% YoY in April 2019 as compared to 3.18% for March 2019 on account of stable food inflation.
The Consumer Price Inflation (CPI) index came at 2.92% YoY in April as compared to 2.86% in the previous month on benign food prices.

Growth

India’s Real Gross Domestic Product (GDP) grew at 5.8% YoY in Q4 FY19 reducing from the pace of 6.6% in Q3FY19. Private consumption grew 7.2% YoY for the quarter. The gross fixed capital formation growth fell sharply to (~3.6% YoY).

Other macro developments (fiscal deficit and household savings)

India’s fiscal deficit for FY19 was at 3.39% against the earlier budgeted 3.3%, a marginal increase – a decent performance by the government given the headwinds it faced on lower GST tax collections. The budgeted number for FY20 also stands at 3.4% including the new income supplement scheme for marginal farmers to the tune of approximately US$10bn.

Market Outlook

Modi government has been reelected with an absolute majority for the BJP. The new cabinet ministers have been assigned their roles. Among the key changes from the past 5 years have been - Mr. Amit Shah looking after Home Ministry. Mr. Rajnath Singh being assigned the Defense Ministry. Mrs. Nirmala Sitharaman is the new Finance Minister and Mr. S Jaishankar the new External Affairs Minister. The role of the new finance minster would be critical given the slowdown in growth in economy led by tight liquidity and the NBFC/HFC sector ALM (Asset Liability Mismatch) issues.

Farm loan waivers/handouts are increasingly becoming popular instruments among all political parties constraining future government capital expenditure and crowding out potential private investments. FY20 budget has more of the same with the government promising Rs 6000 per annum income support scheme for marginal farmers totaling to approximately US$10 bn annual spend.

Near term strong 15%+ CAGR earnings growth by Nifty/Sensex companies along with reasonable valuations make us optimistic of our performance going forward.p>

In terms of our portfolio positioning, we remain focused on companies with faster earnings growth visibility. We continue to remain overweight on private sector banks on account of their ability to gain market share and maintain relatively higher growth rates.

Long-term structural drivers like demographic advantage, low household debt, limited penetration across different consumer categories, increased potential for financial savings and urbanization makes India a compelling equity story from medium to long term perspective.

We believe investors would be well advised to invest with medium to long term perspective and systematically increase exposure to Indian equity markets..


Designed & Developed by Idealake

Email a friendX

Fields with* marks are mandatory

Name* Email*

Name Email

Name Email

Name Email

Name Email

Sender Name*

Sender Email*

Message