GDP, Monsoon Progress Key To Market Trajectory

Amidst heightened volatility triggered by weak U.S. bond auctions and rising treasury yields sparking a global risk-off sentiment, fresh Trump tariff tantrums and some renewed FII selling; Indian stock market witnessed modest losses during the week ended. Benchmark indices the Nifty and the Sensex ended the week with a decline of 0.7 per cent at 24,853 and 81,721 respectively.

Market action will largely hinge on the behaviour of foreign institutional investors (FIIs). Last week FII sales amounted to Rs11,591 crore. The FII long-short ratio fell from 42.37 percent to 32.99 percent, reflecting a cautious turn among big market players. Indian market remained resilient, buoyed by strong buying from domestic institutional investors (DIIs) and retail participants. Crude oil prices continue to be a key market factor, given their influence on inflation trends.

The Indian rupee snapped a three- day losing streak to appreciate by 50 paise to close at Rs 85.45 against the US dollar over the weekend. The rebound was driven by a sharp decline in the dollar index, strong domestic equities, and improved global risk appetite, even as foreign fund outflows and elevated crude prices continued to exert pressure.

The dollar index, which tracks the greenback against six major currencies, fell 0.60 per cent to 99.36, weighed down by lower US. Treasury yields and renewed demand for riskier assets. In the US markets, the biggest weekly decline for stocks since early April is again testing the risk appetite of everyday investors. Trump’s “rush” towards giving boost to crypto currencies is raising fears of possible forex volatility in coming weeks.

Moody’s downgrade of the US credit rating from “Aaa” to “Aa1,” citing a ballooning federal deficit and a $36 trillion national debt, pressured the US dollar below the 100 mark as it underscored growing concerns over the country’s economic outlook and fiscal sustainability.

Gold rallied more than 5 per cent, reaching a two-week high of $3,366.5 per ounce, driven by a weaker dollar and persistent safe-haven demand. The rally was further supported by a surge in Chinese gold imports despite high prices and increased geopolitical tensions in the Middle East. The metal spiked sharply on Friday following Trump’s latest tariff threats targeting the EU and Apple.

In near term, Indian market direction will be dictated by macro-economic data like India GDP data, progress of monsoon, the US federal budget, inflation figures, and weekly jobless claims. Trump’s renewed tariff threats will remain center stage, keeping risk appetite subdued.

IPO Corner: After a small hibernation, the primary market is going to be busy next week with a total of nine initial public offerings (IPOs) worth more than Rs 6,900 crore, including four from mainboard segment. This is the first time in the current year that four public issues from the mainboard segment are opening in a single week, as last this was seen in December 2024. The improved market sentiment from the second week of April seems to be boosting the primary market mood. It is pertinent to observe that the Nifty surged 14 percent and the Nifty Midcap 100 index gained more than 20 percent so far from April lows. Companies like Schloss Bangalore and Aegis Vopak Terminals are leading the return with sizable public issues, though most firms are opting for modest valuations and trimming their offer-for-sale portions to suit current investor appetite. In the mainboard segment, Brookfield-backed Schloss Bangalore, which operates hotels, palaces and resorts under The Leela brand, will be the first to open its Rs 3,500 crore maiden public issue next week, with price band of Rs 413-435 per share. The Aegis Vopak Terminals that operates storage terminals for liquefied petroleum gas plans to raise Rs2,800 crore, at the upper end of price band of Rs 223-235 per share. Prostarm Info Systems plans to raise Rs168 crore. The UPS & inverter manufacturer has fixed price band at Rs95-105 per share. Scoda Tubes, the stainless-steel tubes and pipes maker aims to raise Rs 220 crore and has set price band at Rs 130-140 per share. Observers believe if the sentiment remains positive the number of IPOs launch in the coming months could increase substantially as more than 60-65 companies including LG Electronics India, NSDL, Brigade Hotel Ventures, Credila Financial, Sri Lotus Developers, Caliber Mining and others are ready with SEBI approval. Over 80 companies, including startups like Zepto, PineLabs, Lenskart, and PhonePe, are in different stages of IPO approval. SEBI is hopeful of resolving pending concerns around the long- delayed NSE IPO. If stability continues, a strong wave of listings is expected between September 2025 and February 2026, “pulling away” funds from the secondary market.

FUTURES & OPTIONS / SECTOR WATCH

Tracking the volatility in the underlying cash market, derivative segment also witnessed sharp whipsaw movements in several stock futures. Despite market closing on a positive note over the weekend it closed the week relatively flat. The combined market valuation of six of the top-10 most valued firms eroded by Rs 78,166.08 crore last week. The Nifty slipped 0.67 per cent for the week, while the Bank Nifty was down 0.08 per cent. The coming week will be a monthly F&O expiry week. In the options market, prominent Call open interest for Nifty was seen at the 25,000 strike, while the notable Put open interest was at the 24,500 strike. For Bank Nifty, the prominent Call open interest was seen at the 55,500 and 56000 strikes, whereas notable Put open interest was at the 55,000 strike. Implied volatility (IV) for Nifty’s call options settled at 15.03 per cent, while put options conclude at 15.95 per cent. The India VIX, a key market volatility indicator, closed the week at 17.26 per cent. The Put-Call Ratio Open Interest (PCR OI) for the week was 0.79. Only if Nifty clears 25,150 market can see a quick rally toward 25,500. But if the index slips below 24,500, expect a sharp sell off. If 24,500 holds, adopt buy on dips strategy. Keep leveraged exposures at modest levels, a cautious outlook is advised for the present. Savvy funds are accumulating PSU Banks (many are available cum dividend at attractive yields). Buy PNB, Canara Bank and UCO Bank. Coming week may yet test traders’ patience, as no clear direction is emerging on the stage, leaving market players searching for stronger signals amid all the noise. Stocks looking good are Axis Bank, Ashok Leyland, BHEL, Jio Financial, NHPC, PNB and Union Bank. Stocks looking weak are Biocon, Colgate, Cummins, HUDCO, Jubilant Food, Patanjali and Shree Cements.

(The author is a senior maket analyst and former vice- chairman, Andhra Pradesh State Planning Board)

STOCK PICKS

HDFC Life Insurance Company Ltd

HDFC Life Insurance Company Ltd is an India-based life insurance company. The company provides a range of individual and group insurance solutions across India. The portfolio comprises of various insurance and investment products such as protection, pension, savings, investment, annuity, and health. The company offers long term savings, protection and retirement or pension products. The company operates in three segments: participating (Par) segment products includes endowment, savings cum protection and pension plans; non-participating (Non Par) segment products includes term protection, savings cum protection, immediate and deferred annuity and health plans under Individual business and credit life, term life, fund based pension, group variable plans under Group business; and unit- linked (UL) product includes Unit Linked Life and fund-based Pension plans under Individual and Group businesses. Exide Life Insurance Company Ltd is the subsidiary of the company.

The company reported a 16 per cent year-on- year rise in fourth-quarter profit, on high demand for its group insurance offerings. Growth in its market- or unit-linked insurance plans (ULIPs) slowed due to volatility in India’s equity markets. ULIPs accounted for 39 per cent of the company’s overall product mix, up from 37 per cent a quarter ago and 35 per cent a year earlier. A rise in demand for group insurance plans in the January-to- March quarter boosted premium income for the company. Group insurance policies cover a group of people under one contract and are generally utilised by firms for their employees. HDFC Life Insurance’s value of new business (VNB), or expected profit from new policies, rose 11.5 per cent to 13.76 billion rupees. Buy on declines for medium term price target of Rs1250.