scorecardresearchMarket Wrap: Sensex, Nifty end lower; bank, financials among top drags

Market Wrap: Sensex, Nifty end lower; bank, financials among top drags

Updated: 03 Jun 2022, 04:24 PM IST
TL;DR.

  • Sensex ended 49 points, or 0.09 percent, lower at 55,769.23 while the Nifty closed 44 points, or 0.26 percent lower at 16,584.30.

Mid and smallcaps underperformed as the BSE Midcap index fell 1.45 percent and the smallcap index declined 1.16 percent. Photo Credit: Pixabay

Mid and smallcaps underperformed as the BSE Midcap index fell 1.45 percent and the smallcap index declined 1.16 percent. Photo Credit: Pixabay

Key equity indices ended slightly lower on June 3 on losses led by shares of banking and financial heavyweights such as ICICI Bank, Axis Bank and HDFC twins.

The sentiment remained weak amid mixed global cues while crude oil prices retreated after OPEC+ countries decided to increase production targets by slightly more than planned. But Brent Crude traded neat the $115 a barrel mark as tight global supply and rising demand scenario capped the decline. The rupee ended 2 paise lower at 77.63 per dollar.

Sensex ended 49 points, or 0.09 percent, lower at 55,769.23 while the Nifty closed 44 points, or 0.26 percent lower at 16,584.30.

Mid and smallcaps underperformed as the BSE Midcap index fell 1.45 percent and the smallcap index declined 1.16 percent.

Among the sectoral indices, BSE Power, Utilities and Basic Materials indices fell more than 2 percent each.

The market seems to now have shifted focus to the next week's RBI MPC outcome. At a time when growth is losing steam and inflation is high, participants will focus on what RBI thinks of growth and inflation trajectory.

"The late sell-off indicates the lack of confidence in the domestic market driven by the concerns over Central Bank policy. While in the global market, the investors were waiting for the release of US job data. The RBI is expected to hike rates by 25bps to 35bps and the Fed by 50bps, but the outlook & changes in the economic growth and inflation will determine the market trend. If the central banks decide on a stringent policy tightening, the market mood can swing bearish," said Vinod Nair, Head of Research at Geojit Financial Services.

In the 30-share pack Sensex, 11 stocks ended in the red while 19 stocks ended in the green. Shares of Reliance Industries (up 2.02 percent), Infosys (up 0.94 percent), Larsen & Toubro (up 0.85 percent), Sun Pharma (up 0.58 percent) and TCS (up 0.46 percent) ended as the top gainers in the Sensex index.

On the other hand, shares of UltraTech Cement (down 5.49 percent), Maruti (down 2.71 percent), NTPC (down 2.51 percent), Axis Bank (down 2.18 percent) and Bajaj Finserv (down 2.09 percent) ended as the top laggards.

On a weekly basis, however, the market ended in the green. The Sensex rose 1.61 percent this week while the Nifty ended 1.42 percent higher. BSE Midcap index saw a gain of 1.14 percent while the smallcap index rose 2.98 percent.

"The recovery in the global indices combined with bargain hunting on the domestic front has helped the index to witness a rebound recently. However, this move lacks decisiveness due to lingering issues like inflation, geopolitical tension, etc.," said Ajit Mishra, VP - Research, Religare Broking.

"We recommend booking profit on the rise citing a strong hurdle at 16,900 in Nifty and waiting for further clarity. Stocks, on the other hand, are offering opportunities on both sides so traders should align their positions accordingly. Going ahead, apart from the global cues, the upcoming RBI monetary policy meet and monsoon progress will be in the focus for cues," Mishra added.

Technical

Nifty50 witnessed selling pressure as it tested its 200-day exponential moving average (EMA) with an intraday high of

16,793 levels. This sell-off with a bearish candle can be an early indication of short term reversal, said Mazhar Mohammad, Founder & Chief Market Strategist, Chartviewindia.in.

It becomes critical for the bulls to defend the low of 16,578 to retain their chances of coming back. Else, the weakness may initially extend towards 16,400 but the trend may once again change in favour of bears if it closes below 16,370. For time being, traders are advised to remain neutral as the market and they can wait for further cues from the forthcoming monetary policy of the RBI, said Mohammad.

Nifty has formed an 'Open Bearish Marubozu' kind of candlestick pattern on the daily timeframe which indicates weakness for upcoming sessions, Palak Kothari, a research associate of Choice Broking observed.

"The index has faced resistance from rising trendline which points weakness in the counter. Nifty has given closing below 89- four hourly moving average which indicates sustain below the same can show downside moment in the counter. The momentum indicators 'Stochastic' was trading with a negative crossover on an hourly chart which suggest downside journey in the counter. The Nifty may find Strong support around 16,400, while on the upside 16,800 may act as an immediate hurdle," said Kothari.

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

 

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First Published: 03 Jun 2022, 04:24 PM IST