Market Wrap: Sensex, Nifty close higher ahead of RBI MPC outcome; investors richer by over ₹2 lakh crore in a day
5 min read 07 Jun 2023, 03:32 PM ISTSensex closed with a gain of 350 points, or 0.56 per cent, at 63,142.96 while the Nifty ended at 18,726.40, up 127 points, or 0.68 per cent.
PremiumDomestic equities ended with decent gains on Wednesday (June 7) on all-round buying ahead of the Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) meeting outcome on June 8 which is expected to maintain the status quo on interest rates as growth remains strong and inflation staying withing the RBI's tolerance zone of 4-6 per cent in April.
India’s retail inflation slowed to an 18-month low in April to 4.7 per cent from 5.66 per cent in the preceding month. In April, RBI announced a pause in rate hikes but did not change its policy stance from "withdrawal of accommodation" as it wanted to stand ready to take steps if required.
Read more: A status quo on rates or a cut coming soon?
Read more: RBI Policy: Repo rate decision on June 8; Here's what to expect
Read more: Could the central bank signal the end of the tightening cycle?
Read more: RBI MPC meeting June 2023: How to tweak your stock portfolio — explained.
Sensex opened 125 points higher at 62,917.39 and touched the intraday high and low of 63,196.43 and 62,841.95 respectively, before ending with a gain of 350 points, or 0.56 per cent, at 63,142.96 while the Nifty ended at 18,726.40, up 127 points, or 0.68 per cent.
Mid and smallcap indices clocked strong gains and outperformed the benchmark indices. The BSE Midcap index rose 1.09 per cent and the Smallcap index ended 1.15 per cent higher.
The overall market capitalisation of BSE-listed firms rose to ₹289 lakh crore from ₹286.6 lakh crore in the previous session, making investors richer by ₹2.4 lakh crore in a single day.
Global markets were mixed as weak Chinese trade data weighed on sentiment, aggravating concerns over global economic growth. Investors now shift focus to the next week's inflation data and the US Federal Reserve meeting.
The US dollar rose against its peers and Turkey's currency lira fell to a record low against the dollar.
"Turkey's lira plunged 7 per cent to a record low on Wednesday in its biggest daily selloff since a historic 2021 crash, as the newly-elected government appeared to loosen stabilising measures in its pivot to more orthodox policies," reported Reuters.
Meanwhile, the rupee ended 6 paise higher at 82.55 per dollar amid gains in the domestic equity market. Brent Crude rose about half a per cent and traded near the $77 per barrel mark.
As many as 257 stocks, including Axis Bank, Bajaj Auto, Britannia Industries, DLF, Hero MotoCorp, IndiGo, Mahindra and Mahindra, Maruti Suzuki, Tata Motors, Titan and UltraTech Cement, hit their fresh 52-week highs in intraday trade on BSE.
Top Nifty Gainers and Losers
As many as 43 stocks ended in the green in the Nifty50 index, with shares of Britannia Industries (up 4.17 per cent), Tata Consumer (up 3.89 per cent) and BPCL (up 3.30 per cent) as the top gainers.
On the other hand, only seven stocks - Kotak Mahindra Bank (down 1 per cent), Cipla (down 0.98 per cent), Maruti (down 0.65 per cent), Bajaj Finance (down 0.41 per cent), Adani Ports (down 0.26 per cent), ICICI Bank (down 0.22 per cent) and Mahindra and Mahindra (down 0.16 per cent) - ended lower in the index.
All-round buying
The domestic market witnessed all-round buying as all sectoral indices ended with gains, with Nifty Realty, Metal, FMCG and Oil & Gas rising over a per cent each.
Nifty Healthcare, Consumer Durables, IT, PSU Bank and Auto rose up to a per cent. Nifty Bank index ended 0.25 per cent higher at 44,275.30.
Experts' Views on Markets
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities pointed out that the market rallied sharply and witnessed broad-based buying support ahead of the credit policy with the Sensex ending past the crucial 63,000 mark.
"Upbeat moves prevailed throughout the session as investors are hoping a rate hike pause amid improving the domestic macroeconomic situation. All eyes will be on the RBI’s growth outlook and inflation projection for the year, and in case there is any downgrade in inflation expectations, optimism will likely persist," said Chouhan.
Vinod Nair, Head of Research at Geojit Financial Services said investors are becoming more optimistic due to the anticipation of a positive revision in the RBI’s inflation forecast during the ongoing MPC meeting.
"It is expected that the RBI will maintain its pause on rate hikes, considering the significant improvement in inflation, which has now come within the RBI's comfort zone. Furthermore, the participation of FIIs as net buyers, after a brief halt, contributed to today's market rally, particularly driven by mid-and small-cap stocks," said Nair.
Technical Views on Markets
Chouhan observed that Nifty clearing the important resistance level of 18,650 may intensify the positive momentum.
"A bullish candle on and a higher bottom formation clearly indicates further uptrend from the current levels. For the breakout traders now, 18,650 would be the key support level to watch out for. Above this, the market could rally to 18,800-18,875. On the flip side, below 18,650, the uptrend would be vulnerable and below the same, the index could retest the level of 18,600-18,550," said Chouhan.
Rahul Ghose, Founder & CEO of Hedged, an algorithm-powered advisory platform said the Nifty index today saw huge put writing at the 18,600 and the 18,700 level for this week's expiry along with put writing even at the 18,800 put leg for the June monthly expiry.
"The 18,800 PE is an in-the-money options leg. This is a very bullish sign and the current candle closing of today also signifies momentum on the upside. The all-time high levels on the Nifty index have a very high probability of breaking in the June series itself. The near-term bottom for the index has now shifted to 18,400 from the earlier band of 18,000 to 18,200," said Ghose.
Read all market-related news here
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
"Exciting news! Mint is now on WhatsApp Channels 🚀 Subscribe today by clicking the link and stay updated with the latest financial insights!" Click here!
