Sell in May and go away!

In all things it is better to hope than to despair - Goethe. There’s despair on the street given that for many years, May to September has been more or less challenging for equities. We are staring at another boring opening after an unusually sedate F&O expiry. However, there is a silver lining in the dark clouds. Things might just perk up a wee bit amid reports that the Government could dilute the controversial GAAR to pacify agitating FIIs and breathe some life into the market. Another positive news is that monsoon is likely to be normal yet again. Also, the Cabinet has approved raising the cap on voting rights in private banks. The Nifty will see two new entrants today in Asian Paints and Bank of Baroda. They will replace R Power and RCOM. Important results for the day include ICICI Bank, Axis Bank, Jindal Steel, HCC, Hexaware and Siemens. Asian markets are indecisive and largely flat. US markets rallied overnight while European indices finished mixed. While markets in the UK and Germany rose, that in France was flat. Spanish stocks slid after the S&P downgraded the debt-stricken nation by two notches. VIX has dropped substantially. So, we could see dull and rangebound trade in the near term before there is any meaningful turnaround. Stick to a wait-and-watch approach and be stock specific. Indian markets ended on a flat note amid lack of major triggers to break beyond the range of 5130-5300. The Nifty has been going through a distribution phase since the last two months and a move below 5130 could accelerate the selling pressure in the near term. Key Results Today: Axis Bank, Hexaware Tech, HCC, ICICI Bank, Indiabulls Financial, Jindal Steel, Mahindra Lifespace Developers, Siemens and Thomas Cook. Trend in FII flows: The FIIs were net sellers of Rs 3.76bn in the cash segment on Thursday while the domestic institutional investors (DIIs) were net buyers of Rs 634.9mn, as per the provisional figures released by the NSE. The FIIs were net sellers of Rs 1.82bn in the F&O segment on Thursday, according to the provisional NSE data. The foreign funds were net sellers of Rs 2.8bn in the cash segment on Wednesday while the mutual funds were net sellers of Rs 1.09bn, according to the SEBI figures. Global Data Watch: Bank of Japan Interest Rate Decision, Japan CPI, Japan industrial production, Japan retail sales, Japan unemployment rate, Japan household spending, Japan housing starts, US annualized GDP (Q1), US Real Personal Consumption Expenditures (QoQ) (Q1), US Reuters/Michigan Consumer Sentiment Index (Apr), UK Nationwide Housing Prices (MoM) (Mar) and Germany Gfk consumer confidence.