Mumbai: The adage “sell in May and go away" was not true for the month, and analysts are glad that the markets held up to eke out a minor gain in May, despite the macro pressures—crude oil prices breaching $80 a barrel, a depreciating rupee, and lacklustre corporate earnings.

The support of domestic institutional investors was key in May. While foreign institutional investors (FIIs) sold a net of $1.2 billion of Indian shares in the month, domestic institutional investors (DIIs) pumped in a net of Rs15,320.5 crore—the highest such inflow since February.

The BSE’s 30-share Sensex closed 0.46% higher at 35,322.38.

The outlook for the market for June looks bright in light of the normal rainfall forecast this monsoon, and encouraging GDP (gross domestic product) data for the March quarter.

“The market at the end of May is good enough, with all the noise around oil prices, and sliding rupee. This kind of performance is some relief," said market analyst Ambareesh Baliga. The depreciating rupee, which fell 1.09% in May to close at 67.41 against the US dollar, was also hurting.

“Going ahead, monsoon should spell good news, given the normal forecast. Oil is also likely to cap further gains, and I believe it will be capped at $80 per barrel," he added. For 2019, Baliga expects crude oil to trade in the range of $70-80 a barrel.

The Indian economy gained further momentum in January-March 2018 with GDP growth of 7.7%, the highest since the November 2016 demonetisation move and the implementation of the goods and service tax in July 2017.

This is a touch faster than the 7.2% achieved in the October-December 2017 quarter, and well above China’s 6.8% for the quarter ended March. A Reuters poll of 55 economists predicted a Q4 GDP growth rate of 7.3%.

“Markets have been volatile in May, though they ended flat. The bothering negatives were high oil prices, and the fact that earnings were good only in pockets," said Dipen Sheth, head of institutional research, HDFC Securities

Sheth said that while monsoon is looking good, one needs to wait and see how it develops. Electoral outcomes are also an uncertainty, he added

“GDP is a big positive, and the next quarter may show even better numbers. The government has not given into fiscal pressures, despite oil prices rising, and that is creditable. The order book is also swelling for infra companies. Rural income is looking buoyant," said Sheth.

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