scorecardresearchMarket Wrap: Market rises on crude comfort; energy, oil & gas stocks hog limelight

Market Wrap: Market rises on crude comfort; energy, oil & gas stocks hog limelight

Updated: 02 Jun 2022, 04:26 PM IST
TL;DR.
Sensex ended with a gain of 437 points, or 0.79 percent, at 55,818.11 with 20 stocks in the green and 10 in the red. The Nifty50 closed 105 points, or 0.64 percent, higher at 16,628.
BSE Midcap index closed with a nominal loss of 0.04 percent while the smallcap index logged a gain of 0.60 percent. Photo: Pixabay

BSE Midcap index closed with a nominal loss of 0.04 percent while the smallcap index logged a gain of 0.60 percent. Photo: Pixabay

The Indian market ended with decent gains on June 2, supported by bargain hunting by investors as a fall in crude oil prices also influenced the sentiment.

Crude oil prices retreated amid reports that Saudi Arabia and other OPEC members may boost oil output to offset a drop in Russian production. Brent Crude prices fell more than 2 percent and traded below the $115 a barrel mark. The rupee, however, ended 8 paise lower at 77.61 per dollar.

Now the focus of the market is RBI MPC meet outcome which is due next week on June 8. A rate hike is widely expected and is unlikely to surprise the market.

"We believe the rate hike wouldn't be a great surprise as a recent unexpected rate hike by RBI, lowering of fuel prices by the central government and certain restrictions/ban on exports are acting as measures to avoid imported inflation into the country," said Ashish Chaturmohta, Director and Head, Advisory Research, JM Financial Services.

Sensex ended with a gain of 437 points, or 0.79 percent, at 55,818.11 with 20 stocks in the green and 10 in the red. The Nifty50 closed 105 points, or 0.64 percent, higher at 16,628.

Shares of Reliance Industries (up 3.51 percent), Bajaj Finserv (up 2.88 percent), Sun Pharma (up 2.35 percent), HCL Tech (up 2.08 percent), TCS (up 1.98 percent) and Infosys (up 1.96 percent) ened as the top gainers in the Sensex index.

On the flip side, shares of HDFC (down 1.69 percent), Power Grid (down 1.51 percent), Hindustan Unilever (down 1.03 percent), HDFC Bank (down 0.80 percent), Kotak Mahindra Bank (down 0.49 percent) and Maruti Suzuki (down 0.38 percent) ended as the top laggards.

BSE Midcap index closed with a nominal loss of 0.04 percent while the smallcap index logged a gain of 0.60 percent.

"After a subdued start, markets bounced back sharply on the back of renewed optimism as investors lapped up shares of the recently beaten down IT and oil & gas stocks," said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.

Most sectoral indices ended in the green today, with BSE Energy and Oil & Gas indices rising 2.33 percent and 2.14 percent respectively. IT, Teck and Utilities indices rose more than a percent each.

The overall market capitalisation of BSE-listed firms rose to 259.05 lakh crore from 257.03 lakh crore on June 1, making investors richer by 2.02 lakh crore in a single day.

"High-frequency data like GST collection and PMI have shown a good start to FY23. Crude prices have declined to provide an edge to the performance of the Indian market. However, a lot will depend on the central bank’s policy in India & US, which will be announced in the next two weeks," said Vinod Nair, Head of Research at Geojit Financial Services.

Technicals

Chouhan pointed out that the Nifty took support near 16,450 and reversed the trend. A promising reversal formation on intraday charts and a long bullish candle on daily charts is indicating a further uptrend from the current levels.

"For day traders, 16,550 would act as a trend decider level, above which the Nifty could rally till 16,720. In case of any further upside, the index could rally up to 16,800. On the flip side, below 16,550, uptrend would be vulnerable and could falter up to 16,450,” said Chouhan.

Rupak De, Senior Technical Analyst at LKP Securities observed Nifty formed an engulfing kind of pattern on the daily chart, suggesting bullishness. Daily RSI is in bullish crossover and rising, De said, adding that on the higher end, the index has resistance at 16,700, and above 16,700, the Nifty can move towards 17,000. The trend is likely to remain positive as long as it sustains above 16,400, he said.

Mazhar Mohammad, Founder & Chief Market Strategist, Chartviewindia.in said the last three sessions of volatile moves between 16,700 and 16,400 is hinting that the index is in a consolidation mode. Hence, for a sustainable up move, it needs a close above 16,750 where the 200-day exponential moving average (EMA) is placed.

"In that scenario, a higher target of 17,100 can be expected. Contrary to this, a close below 16,400 can induce a fresh bout of weakness in the index. In simple words, the Nifty may remain trendless in the near term unless emerges out of the consolidation zone of 16,700 – 16,400," said Mohammad.

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

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First Published: 02 Jun 2022, 04:26 PM IST