Market experts attribute the current foreign investor selling frenzy to a global shift in focus towards China's cheaper markets, not India's election concerns. Analysts remain bullish on India's long-term prospects. Union Home Minister Amit Shah echoed this, calling the current weakness a potential buying opportunity.

The stock market should not be linked with elections, but a stable government does help it perform better, Shah told the media on Sunday. He also suggested that the market will shoot up after June 4th as a result of the BJP and its allies sweeping the Lok Sabha elections. The seven-phase elections come to an end with the counting of votes on June 4th.

In the week ended on Friday, 17 May 2024, the S&P BSE Sensex gained 1,252.56 points or 1.72% to settle at 73,917.03. The Nifty 50 index added 410.9 points or 1.86% to close at 22,466.10. The BSE Mid-Cap index rallied 4.42% to end at 42,841.10. The BSE Small-Cap index jumped 4.83% to close at 47,591.67.

Weekly Index Movement:

The key equity indices clawed their way back after a morning wobble on Monday. The barometer index, the S&P BSE Sensex gained 111.66 points or 0.15% to 72,776.13. The Nifty 50 index added 48.85 points or 0.22% to 22,104.05.

The frontline indices rallied for a third straight day on Tuesday, The barometer index, the S&P BSE Sensex gained 328.48 points or 0.45% to 73,104.61. The Nifty 50 index jumped 113.80 points or 0.51% to 22,217.85.

The domestic equity benchmarks ended with minor losses on Wednesday, snapping a three-day rising streak.. The barometer index, the S&P BSE Sensex declined 117.58 points or 0.16% to 72,987.03. The Nifty 50 index lost 17.30 points or 0.08% to 22,200.55.

The key barometers indices ended with major gains on Thursday. The barometer index, the S&P BSE Sensex gained 676.69 points or 0.93% to 73,663.72. The Nifty 50 index added 203.30 points or 0.92% to 22,403.85.

Indian equity in dices ended with decent gains on Friday, rising for the second day in a row. the barometer index, the S&P BSE Sensex gained 253.31 points or 0.34% to 73,917.03. The Nifty 50 index added 62.25 points or 0.28% to 22,466.10.

Economy:

India's industrial output expanded 4.9% year-over-year in March, slower than the 5.6% in February. The slowdown was primarily driven by weaker growth in mining, which rose just 1.2% annually in March compared to a robust 8.1% surge in February.

India's foreign exchange reserves witnessed a significant increase after three weeks of consecutive dips. For the week ending May 3rd, reserves jumped $3.668 billion to reach $641.59 billion. This is still below the all-time high of $648.562 billion set in early April.

Meanwhile, India's inflation based on all India Wholesale Price Index (WPI) rises to a 13-month high of 1.26% (provisional), driven by food, electricity, and fuel costs. This is up from 0.53% in March. Further, India's inflation based based on all India Consumer Price Index (CPI) eases to 4.83% (provisional), with rural areas (5.43%) experiencing higher inflation than urban areas (4.11%). The CPI continues a downward trend from January (5.10%) and February (5.09%).

Separately, Passenger vehicle sales in India reached a record high in April 2024, according to the Society of Indian Automobile Manufacturers (SIAM). The increase was driven by strong utility vehicles sales, which rose 21% year-over-year. Overall sales grew 1.3% to 335,629 units compared to 331,278 units in April 2023.

India's exports grew slightly (1%) in April to $35 billion, but imports rose faster (10%) leading to a wider trade deficit of $19.1 billion. This deficit is the highest in four months. Positive signs are growth in exports of electronics, chemicals, and pharmaceuticals despite global economic challenges. The wider trade deficit is partly due to a jump in gold imports.

Stocks in Spotlight:

Tata Motors slumped 9.67%. The auto major reported a consolidated net profit of Rs 17,528.59 crore in Q4 FY24, steeply higher from Rs 5,496.04 crore posted in Q4 FY23. Total revenue from operations increased 13.52% YoY to Rs 1,19,213.35 crore in the quarter ended 31 March 2024.

Meanwhile, the company's board has recommended a final dividend of Rs 6 per ordinary share and Rs 6.20 per ‘A’ ordinary share, for the financial year ended 31 March 2024. The dividend, if declared at the AGM, shall be paid to the eligible shareholders on or before 28 June 2024.

Mahindra & Mahindra's (M&M) surged 14.5%. The company’s standalone net profit jumped 31.58% to Rs 2,038.21 crore on 11.24% increase in revenue from operations to Rs 25,108.97 crore in Q4 FY24 over Q4 FY23.

The company's revenue from the Auto segment was at Rs 19,910.34 crore (up 20.03% YoY), Farm Equipment Sector (FES) revenue was at Rs 5,226.95 crore (down 13.05% YoY).

Separately, the company said that its total production jumped 19.02% to 70,025 units in the month of April 2024 as compared with 58,830 units produced in the same period last year. The auto major's total sales stood at 68,614 units in April 2024, registering a growth of 13.44% on YoY basis. On the other hand, exports for the period under review rose 2.43% YoY to 1,857 units.

Bharti Airtel rallied 3.19. The telecom major's consolidated net profit dropped 31.07% to Rs 2,071.6 crore in Q4 FY24 as against Rs 3,005.6 crore reported in Q4 FY23. Revenue from operations increased 4.41% YoY to Rs 37,599.1 crore in Q4 FY24. The growth was impacted by devaluation of African currencies during the period, particularly Nigerian Naira.

Zomato dropped 4.35%. The online food delivery platform reported consolidated net profit of Rs 175 crore in Q4 FY24 as against a net loss of Rs 188 crore posted in Q4 FY23. Revenue from operations soared 73.24% to Rs 3,562 crore in Q4 FY24 as compared with Rs 2,056 crore posted in corresponding quarter last year. Adjusted revenue stood at Rs 3,873 crore in Q4 FY24, up 6% QoQ and up 61% YoY.

Indian Energy Exchange (IEX) jumped 4.24%. The company’s consolidated net profit rose 9.45% to Rs 96.69 crore on 13.31% increase in revenue from operations to Rs 121.28 crore in Q4 FY24 over Q4 FY23.

Global markets:

Japan's wholesale inflation edged up slightly by 0.9% year-on-year in April.

Japan's GDP contracted by 0.5% in the first quarter of 2024, a sharp reversal from the previous quarter's modest growth.

China's industrial production grew 6.7% year-on-year in April, accelerating from March's 4.5% rise, according to data from the National Bureau of Statistics. However, consumer spending remained weak, with retail sales growing 2.3% year-on-year in April, down from March's 3.1% increase.

U.S. wholesale prices surged by 0.5% in April, exceeding expectations, in a trend that could lead to extended periods of higher Federal Reserve interest rates.

US consumer inflation (CPI) rising at a slightly slower pace than expected in April. While inflation remains above the Federal Reserve's target, the slowdown sparked hope for a policy shift by the Fed.