Stock Market Today: Sensex, Nifty fall for second consecutive day; mid, smallcaps outperform
4 min read 01 Jun 2023, 03:31 PM ISTSensex ended 194 points (0.31 per cent) lower at 62,428.54 while the Nifty closed with a loss of 47 points (0.25 per cent) at 18,487.75.
PremiumEquity benchmarks the Sensex and the Nifty ended lower for the second consecutive session on Thursday (June 1) on losses led by select heavyweights, including Kotak Mahindra Bank, ICICI Bank and Bharti Airtel, amid mixed global cues.
After opening 114 points higher at 62,736.47, Sensex remained in a narrow range throughout the session without major positive triggers. Analysts pointed out that the market had already discounted factors such as strong domestic GDP numbers and the US debt ceiling deal, which is why it remained rangebound for the session.
While India's growth outlook is positive, recent macro data from China hinted that the world's second-largest economy was still struggling. China's poor growth can impact global economic growth, roiling the mood of the market.
Besides, investors now feel that a pause in rate hikes from the US Fed in June could be short-lived if inflation remains elevated and the US jobs market remains tight.
As per a Wall Street Journal report, Federal Reserve officials signalled the central bank may keep the rates steady in the June meeting but may raise them again later this summer.
“A decision to hold our policy rate constant at a coming meeting should not be interpreted to mean that we have reached the peak rate for this cycle," Wall Street Journal reported quoting Fed governor Philip Jefferson saying so in a speech Wednesday in Washington.
Sensex fell 263 points in intraday trade before ending 194 points (0.31 per cent) lower at 62,428.54 while the Nifty closed with a loss of 47 points (0.25 per cent) at 18,487.75.
Mid and smallcaps, however, ended in the green, outperforming the benchmark Sensex. The BSE Midcap closed 0.11 per cent higher while the Smallcap index rose 0.61 per cent.
Nearly 180 stocks, including Bajaj Auto, Aurobindo Pharma, IndusInd Bank, Lupin, Marico, Indian Hotels Company and Godrej Consumer Products, hit their fresh 52-week highs in intraday trade on BSE.
Meanwhile, crude oil prices were little changed in global markets as investors digested news of a potential pause in US interest rate hikes and the passage of the US debt ceiling bill. Reports of rising oil inventories in the world's largest oil consumer capped oil prices. Brent crude traded near the $73 per barrel mark.
The rupee, on the other hand, jumped 31 paise to close at 82.41 per dollar.
Top Nifty Gainers and Losers
Shares of Apollo Hospitals (up 4.35 per cent), Divi's Labs (up 2.55 per cent) and Bajaj Auto (up 1.63 per cent) ended as the top gainers in the Nifty index.
On the flip side, shares of Coal India (down 4.66 per cent), Kotak Mahindra Bank (down 4.24 per cent) and Bharti Airtel (down 2.71 per cent) ended as the top losers in the index.
As many as 28 stocks ended higher while 22 stocks ended lower in the Nifty index.
Banking, financial indices top losers
Nifty Bank index ended as the top loser among sectoral indices, falling 0.77 per cent, followed by Nifty Private Bank (down 0.71 per cent) and Nifty Financial Services (down 0.63 per cent).
Oil & Gas (down 0.13 per cent), Metal (down 0.10 per cent) and FMCG (down 0.09 per cent) also ended in the red.
Among the gainers, Nifty Realty and Pharma rose over a per cent each, while Healthcare and Media indices rose up to a per cent.
Experts' Views on Markets
"Despite challenges in the global economies, the domestic market displayed better than estimated Q4 earnings growth, along with 7.2 per cent GDP growth in FY23, adding buoyancy to the market during the week. However, today the market closed with a marginal negative bias in which banks witnessed heavy profit booking. Investors turned cautious in anticipation of inflationary pressure in the US after raising the US debt ceiling. The US 10-year bond yield inched higher; the market is looking ahead to the trajectory of US interest rates to get more visibility," said Vinod Nair, Head of Research at Geojit Financial Services.
“Markets were sluggish with a negative bias as concerns over the delay in the US debt ceiling bill and decline in China’s factory activity prompted investors to trim exposure in banking and metal stocks. The strong Q4 GDP numbers failed to improve sentiment as the focus shifts to changes in the global arena," said "Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities.
Technical Views on Markets
Sahaj Agrawal, Head of Research of Derivatives at Kotak Securities pointed out that Nifty remains in an uptrend with trend support placed at 18,150.
He said as long as the index maintains this level, the uptrend will continue towards 18,800-19,000.
"For the short term, we are looking at 18,400-18,450 as a support zone. A breach of the trend levels could infuse volatility. Select commodity stocks look interesting from value and risk perspective while frontline IT stocks are expected to underperform in the near term," said Agrawal.
Rahul Ghose, Founder & CEO of Hedged, an algorithm-powered advisory platform, pointed out that the June monthly expiry which had a high concentration of sold 18,500 PE (Put options), got converted to short straddles of the 18,500 strike by market participants.
"There was a good addition of the 18,500 Call OI (open interest) throughout the day. The correction of the last few days should not be considered as a change in trend on the index but rather a profit booking and a buying opportunity at the appropriate support level. The 18,000 to 18,300 demand band is currently a strong level of support for the index which should give a bounce to the index," said Ghose.
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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.
