Stock Market At CloseToday: Sensex, Nifty extend gains into second consecutive session; investors bet on rate hike pause
Indian stock markets, the Sensex and the Nifty, closed in the green for the second consecutive day on 5 June on broadly positive global cues amid hopes of a pause in rate hikes by the US Federal Reserve.
Frontline indices the Sensex and the Nifty ended in the green for the second consecutive session on Monday (June 5) on broadly positive global cues amid hopes of a pause in rate hikes by the US Fed. After last Friday's substantial gains, US stock futures were steady in trade while major European markets were up with mild gains as investors expect Federal Reserve to take a pause on rate hikes next week.
However, gains in the dollar and crude oil prices capped the gains for the market. "The dollar edged up against major peers on Monday, as markets priced in around a 1-in-4 chance of the US Federal Reserve raising benchmark rates this month after robust jobs data on Friday," reported Reuters.
Crude oil prices rose after top crude exporter Saudi Arabia pledged to cut production by a further 1 million barrels per day (bpd) from July to counter macroeconomic headwinds that have depressed markets, reported Reuters. Brent Crude traded nearly two per cent higher near the $77 per barrel mark around 4 pm.
The dollar's rise and elevated crude oil prices exerted pressure on the domestic currency. The rupee fell 37 points, to end at 82.68 per dollar, as per Bloomberg data.
There have been signals from several Fed officials of late that the central bank may take a pause this time to assess the impact of the rate hike on the economy. However, the Fed may resume hiking rates later if they do not see a significant and sustained fall in inflation.
“With the debt ceiling resolved and earnings season out of the way, investors are training their focus on the Federal Reserve’s meeting next week. Up ahead, data on the U.S. services industry will give fresh evidence about the strength of the economy after Friday’s bumper jobs report,” a Wall Street Journal report stated.
Sensex opened 212 points higher at 62,759.19 and rose 396 points to hit the intraday high of 62,943.20. The index closed the day with a gain of 240 points, or 0.38 per cent, at 62,787.47 while the Nifty ended at 18,593.85, up 60 points, or 0.32 per cent.
The BSE Midcap index hit a fresh all-time high of 27436.99 in intraday trade while the BSE Smallcap index hit its 52-week high of 31134.81. The all-time high of the BSE Smallcap index is 31,304.44, which it hit on January 18, 2022. The BSE Midcap index closed 0.29 per cent higher at 27,372.73 while the Smallcap index ended with a gain of 0.51 per cent at 31,043.53.
As many as 246 stocks, including Tata Motors, Titan, Trent, Mahindra and Mahindra, Lupin, IndusInd Bank, IndiGo, DLF, Bajaj Auto, Apollo Hospitals and Bharat Electronics, hit their fresh 52-week highs in intraday trade on BSE.
Top Nifty Gainers and Losers
The Nifty50 index saw equal numbers of stocks falling and rising today.
Among the 25 stocks that gained, Mahindra and Mahindra (up 3.99 per cent), Axis Bank (up 2.69 per cent) and Tata Motors (up 1.79 per cent) ended as the top gainers.
On the flip side, Divi's Labs (down 1.30 per cent), Asian Paints (down 1.10 per cent) and Tech Mahindra (down 1.08 per cent) ended as the top losers in the index.
Sectoral Indices
Barring Nifty FMCG (down 0.45 per cent), PSU Bank (down 0.43 per cent), IT (down 0.30 per cent) and Healthcare Index (down 0.07 per cent), all sectoral indices ended in the green on NSE.
Nifty Auto rose 1.26 per cent, ending as the top gainer among sectoral indices, followed by Media (up 0.88 per cent), Private Bank (up 0.68 per cent) and Consumer Durables (up 0.63 per cent).
Nifty Bank rose 0.37 per cent to end at 44,101.65.
Experts' Views on Markets
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities observed that optimism in global equities aided the local market sentiment. Also, the end to the US debt ceiling uncertainty and expectations of a rate hike pause by the US Fed provided some fodder to the struggling markets. Banking, financial & other rate-sensitive stocks may witness sharp movements ahead of the RBI’s credit policy later this week.
Vinod Nair, Head of Research at Geojit Financial Services pointed out that the equity market is maintaining stability due to a continuous stream of favourable domestic economic indicators.
Nair added that stronger-than-expected domestic PMI figures, sequential growth in auto sales, and robust expansion in bank credit are instilling investor confidence in India's growth prospects. On the other hand, the US jobs data presented a mixed picture, with non-farm payroll showing acceleration while the unemployment rate surged from 3.4 per cent to 3.7 per cent in May.
Technical Views on Markets
Chouhan said that on daily charts, the Nifty has formed a small bearish candle which indicates indecisiveness between the bulls and bears.
"As long as the index is trading above 18,550, the positive sentiment is likely to continue. Above this, the index could rally to 18,650-18,700. On the flip side, below 18,550, the selling pressure is likely to accelerate. Below this, the index could slip to 18,500-18,450," said Chouhan.
As per Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities, the Nifty is currently experiencing a sideways trend, indicating a lack of clear direction in its price movement. This sideways movement is accompanied by low trading volumes, suggesting a relatively lower level of market participation and activity.
"The index has a support level at 18,550, indicating a price level where buyers have shown interest and may provide a foundation for potential price rebounds. On the other hand, there is a resistance level at 18,660, acting as a barrier for upward movements and where sellers may become more active," said Shah.
"Despite the sideways trend, the overall undertone of the market remains bullish. This suggests that the prevailing sentiment favours buying opportunities on dips or temporary price declines. Investors are advised to adopt a 'buy on dip' approach, indicating a strategy of purchasing the Nifty index when it experiences short-term pullbacks," Shah said.
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.
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