Sensex, Nifty end May on bullish note; Q4 GDP data, May auto volume sales to influence trading on Thursday

Stock markets ended May trading on a bullish note, helped by a slew of cues, ranging from Q4 results, GST rate finalisation and upbeat merchandise data. The BSE Sensex hit a fresh lifetime high of 31,255 on Wednesday (May 31) before closing at 31,145, a monthly gain of 4.10 percent.

The NSE Nifty also hit new all-time highs and ended at 9,621 on Wednesday, translating into a gain of 3.40 percent for the month, based on its April 28 closing of 9,304.

For three consecutive days (May 26, 29 and 30), foreign portfolio investors (FPIs) were net sellers of Indian equities worth Rs 1,200 crore in the cash segment, according to data compiled by brokerage Dynamic Levels. On Wednesday, they ended up as net buyers of stocks worth Rs 1,048 crore, according to provisional data released by the National Stock Exchange (NSE).

Gold prices ended Rs 250 lower at Rs 29,100 per 10 gm on Wednesday, while the rupee closed at 64.51 to the US dollar, a gain of 0.24 percent from its previous close.

The biggest trigger for Thursday's (June 1) trading will the Q4 GDP data released by the Modi government after stock markets closed trading on Wednesday. The country's economy grew at 6.1 percent for the fourth quarter ended March 2017 and in the process lost the "world's fastest-growing economy" tag to China that grew 6.9 percent during the quarter.

Read: India loses world's fastest-growing economy tag to China

The full-year GDP growth rate came at 7.1 percent. 

Another factor that would influence trading will be the automobile volume sales data for May that companies will be declaring on Thursday and the next few days.

The BSE Auto index closed 0.69 percent on Wednesday, with two stocks, Maruti Suzuki India Ltd (MSIL) and Hero Motocorp hitting fresh 52-week highs of Rs 7,239 and Rs 3,760, respectively.

MSIL is expected to report around 21.6 percent in growth in its overall volumes, according to a note by brokerage Motilal Oswal Securities Ltd (MOSL) "Our channel check indicate double-digit growth in retail off-take while demand for Baleno and Brezza continue to remain robust as these models still enjoys healthy waiting period of 5- 6weeks," MOSL said.

In the two-wheeler space, Hero Motocorp volume sales are expected to rise about 9.8 percent YoY while Bajaj Auto could post 2.2 percent fall.

Commercial vehicle (CV) sales are likely to fall due to "pre-buying effect on account of change in emission norms coupled with a shortage of BS-4 components to also impact production. We expect TTMT (Tata Motors) and AL (Ashok Leyland) to report a double-digit decline in their CV volumes by 39 percent and 21 percent respectively," MOSL said.

Nirmal Bang Institutional Equities said the results will be mixed. "Automobile sales in May 2017 are expected to be mixed with most companies likely to report YoY growth except commercial vehicle manufacturers. Car sales have been growing in the past few months and we expect the momentum to continue," the brokerage said in a note on Wednesday.

"Two-wheeler sales continue to remain strong because of the marriage season-led demand. In the case of commercial vehicles or CVs, pre-purchases in recent months will restrict sales growth of companies and hence their sales are likely to remain weak in May 2017. Tractor sales are expected to continue their growth momentum with double-digit YoY growth," Nirmal Bang added.