Market Wrap: Market snaps 4-day losing streak; mid, smallcaps underperform

Domestic equities ended higher on June 9, snapping their four-day losing streak, tracking the positive movement in the US futures market.

After opening lower, the equity benchmark the Sensex remained subdued for the most part of the session. However, investors embarked on bargain hunting and bought recently beaten down stocks at cheaper valuations.

The 30-share pack Sensex ended 428 points, or 0.78 percent, higher at 55,320.28, with 20 stocks in the red and 10 stocks in the red. Nifty50 settled with a gain of 122 points, or 0.74 percent, at 16,478.10.

Mid and smallcaps underperformed as the BSE Midcap and Smallcap indices closed 0.46 percent and 0.24 percent higher, respectively.

"The market continued to be dominated by a volatile global market with investors weighing the impact of the upcoming global central bank meetings. However, the domestic market reversed its losses during the closing hours due to positive movements in the US futures. FIIs are cautious ahead of the Fed policy even though the market may have factored in an interest rate hike of 50bps, due to the risk of hawkish measures," said Vinod Nair, Head of Research at Geojit Financial Services.

Shares of Dr Reddy's Labs (up 3 percent), Reliance Industries (up 2.73 percent), Bharti Airtel (up 2.01 percent), Sun Pharma (up 1.36 percent) and Tech Mahindra (up 1.31 percent) ended as the top gainers in the Sensex index.

On the other hand, shares of Tata Steel (down 3.81 percent), NTPC (down 1.18 percent), UltraTech Cement (down 0.93 percent), Bajaj Finance (down 0.91 percent) and SBI (down 0.89 percent) ended as the top laggards.

Among the sectoral indices, BSE Telecom rose 2.10 percent, followed by BSE Energy (up 2.03 percent) and BSE Oil and Gas (up 1.78 percent). BSE Metal index fell 1.66 percent.

Crude oil prices remained elevated as the Brent Crude traded near the $125 a barrel mark boosted by reports that China exports in May may be stronger-than-expected. The rupee ended 3 paise lower at 77.76 per dollar, as per Bloomberg data.

"Markets have been witnessing volatile swings in a broader range and most sectors are trading in tandem with the trend. We reiterate our cautious stance and recommend focusing more on sector/stock selection. Among sectors, auto and oil&gas looks strong to us while metals may continue to trade subdued so plan your positions accordingly," said Ajit Mishra, VP - Research, Religare Broking.

Technicals

Deepak Jasani, Head of Retail Research, HDFC Securities pointed out Nifty made a lower low on June 9 compared to the previous day but managed to close at the highest in the last three sessions.

For the turnaround to sustain, he said, Nifty will have to cross the resistance of 16,661 while 16,515 could act as a support. Unless the ECB sounds very hawkish in its meet later today, the up-move in the Nifty could continue over the next few sessions.

As per Mohit Nigam, Head - PMS, Hem Securities, the key resistance levels for Nifty50 are 16,500 and on the downside 16,200 can act as strong support.

Disclaimer: The views and recommendations made above are those of individual analysts and not of MintGenie.