May 2010 was a bad month for Indian stock market. Selling pressure continued almost all the trading days. But towards the end of the month some recovery also seen. Global uncertainties were the major reason behind this bear run! Doubts about the long term prospects of Euro zone countries are worrying the investors across the globe. As a result of this Indian investors also lost confidence and they engaged in bulk selling. After the global financial crisis  Euro zone crisis is the worst one and now also it is sustaining. FII sell off made a bad impact on Indian indices during May. They sold Indian equities worth Rs.9436.70 Cr. When the residues of the crisis settle down it is expected that they will come back to Indian market. However India’s growth story is still promising, Indian corporates are performing well.
Sensex closed at 16945 in May. It recorded a decrease of 3.5 percent against it’s April closing figure of 17559. Sensex traded in the range 15960-17537 during May. Nifty recorded a fall of 3.64 percent to close at 5086. Smallcap stocks can’t survive the selling pressure and they were down by 7.17 percent- the worst performance by this sector in 2010. Midcap stocks were down by 4.87 percent. All sectors except Health Care and Oil and gas were under selling pressure in May. Metal stocks plunged 14.25 percent. Whereas Reality stocks fell 11.3 percent against last month closing figure. Both banking and power sector stocks were down by 4.4 percent. Health care sector was up by 2.71 percent. Oil and gas sector recorded a growth of 2.6 percent during May.
Domestic mutual fund companies were net buyers. They bought equities worth Rs. 98.60 Cr. Indian market opened weak in June also. But traders are of the view that once the issues settle down there will be renewed buying interest. FIIs withdrew their money only to protect their capital. In the long term view, when Indian market is concerned, we have the growth potential.
Indian economy grew  8.6 per cent during the last quarter of 2009-10, mainly powered by Industry and service sectors. Now the country has an overall GDP growth of 7.4 per cent in 2009-10. Which is more than expected. Inflation eased to 9.59 percent in April. This is the second continuous month the inflation figures show a downward trend. According to reports monsoon will be on track. If this happens in line with expectation food inflation would also become lower. Which is a prime concern for Indian economy.
Indian Finance Minister Mr Pranab Mukherjee expects 8.5 percent GDP growth in 2010-11, which seems to be attainable according to present estimate. From the global financial meltdown we have learned that Indian market is capable of bounce back from any lows. Every crisis is an opportunity. Now is the time to buy good picks at moderate rate. Opportunity never knocks twice!