Market wrap: Sensex, Nifty end higher on fag-end buying; investors get richer by over a lakh crore in a day

Fag-end buying helped domestic equity benchmarks the Sensex and the Nifty end higher on Tuesday (June 20) despite weak global cues after China cut interest rates by less than expected.

US stocks futures and European markets were in the red when the Sensex closed as China disappointed markets by trimming benchmark interest rates below expected lines.

"China cut its benchmark loan prime rates (LPR) for the first time in 10 months on Tuesday, with a smaller-than-expected 10-basis point reduction in the five-year LPR," reported Reuters.

Reuters quoted analysts at BofA global research saying that such marginal easing would likely help prevent growth from slowing sharply but was unlikely to offer a strong boost to reverse the growth slippage in the near future.

Sensex opened eight points higher at 63,176.77 against the previous close of 63,168.30 but soon slipped into the red, falling 366 points to the intraday low of 62,801.91. However, the index managed to end higher on buying in select heavyweights in the last 30 minutes.

Sensex closed with a gain of 159 points, or 0.25 per cent, at 63,327.70 while the Nifty ended at 18,816.70, up 61 points, or 0.33 per cent.

Mid and smallcaps continued their outperformance. The BSE Midcap index ended 0.47 per cent higher at 28,442.44 while the BSE Smallcap index rose 0.40 per cent to 32,497.76. The smallcap index hit its fresh all-time high of 32,533.75 in intraday trade.

The overall market capitalisation of the firms listed on BSE rose to ₹293.5 lakh crore from ₹292.5 lakh crore in the previous session, making investors richer by ₹1 lakh crore in a single session.

Nearly 200 stocks, including Tata Motors, Ashok Leyland, HCL Tech, HDFC Life Insurance Company, IndiGo, JSW Steel, Power Grid and Shriram Finance, hit their 52-week highs in intraday trade on BSE.

Meanwhile, crude oil prices traded in a range on concerns over a fall in fuel demand after the world's largest crude importer China's interest rate cut failed to meet expectations and raised concerns that the world's second-largest economy may remain subdued this year. Brent Crude traded near the $77 per barrel mark. The rupee fell 17 paise to close at 82.12 per dollar.

Top Nifty Gainers and Losers

As many as 36 stocks ended in the green in the Nifty50 pack, with shares of Tata Motors (up 3.07 per cent), HCL Tech (up 2.85 per cent) and Power Grid (up 2.71 per cent) as the top gainers.

On the flip side, shares of Bajaj Finance (down 1.80 per cent), Bajaj Finserv (down 1.23 per cent) and Sun Pharma (down 0.90 per cent) ended as the top losers in the index.

Top gainers, losers today: Tata Motors, HCL Tech, Timken, ZEE, Bajaj twins; check full list here

Sectoral Indices

Barring Nifty Media (down 1.22 per cent), Healthcare (down 0.26 per cent) and Pharma (down 0.19 per cent), all sectoral indices ended higher on NSE.

Nifty IT (up 0.78 per cent), Auto (up 0.74 per cent) and Metal (up 0.70 per cent) rose up to a per cent. The Nifty Bank index ended 0.30 per cent higher at 43,766.50.

Experts' Views on Markets

"The Indian market opened cautiously due to weak global cues, with heightened concerns over the Chinese economy following their decision to cut interest rates after a 10-month pause. Global worries were amplified by concerns of a possible rate hike by the US Fed in its July meeting, with investors eagerly awaiting Powell’s testimony. However, the indices managed to recover smartly, led by an upside in IT and auto stocks," said Vinod Nair, Head of Research at Geojit Financial Services.

“While most of the Asian markets ended laggards, last-hour buying in IT, metal, banking and power stocks helped Sensex regain the 63,000 level in a trading session marked with sharp intra-day volatility. It will not be a smooth one-way rally, with intermittent hiccups such as interest rate uncertainty, global economic slowdown and inflation woes likely to play spoilsport in the near to medium term," said Shrikant Chouhan, Head of Research (Retail), Kotak Securities.

Technical Views on Markets

Chouhan observed that the Nifty took support near 18,650 and bounced back sharply. He said on intraday charts, the index formed a double bottom formation which is indicating the continuation of an uptrend formation in the near future.

"For the day traders, 18,750 would be the trend decider level. Above the same, the index could rally to 18,900-18,925. Below 18,750, the selling pressure is likely to accelerate and the index could retest the level of 18,650-18,620,” said Chouhan.

Ameya Ranadive, an Equity Research analyst at Choice Broking highlighted that as per the volume profile, the Nifty has robust support within the 18,650-18,600 zone. While the open interest (OI) data shows that on the call side, the highest OI is at 19,000 strike price, followed by 18,900 strike price. On the put side, the highest OI is at the 18,700 strike price. These levels are crucial in determining potential resistance and support areas for future market movements.

Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities said the Bank Nifty index saw the bulls hold a support level of 43,400. Currently, the index is trading within a broad range between 43,400 and 44,000.

"A breakout on either side of this range is likely to result in trending moves. As long as the support level of 43,400 is held, a buy-on-dip approach is suggested. Once the index surpasses the level of 44,000 it will witness sharp short covering on the upside towards 45,000 levels," said Shah.

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