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Last Updated : Jun 25, 2019 07:12 AM IST | Source: Moneycontrol.com

A morning walk down Dalal Street | Tread with caution, Nifty may face selling pressure at higher levels

Investors are advised to tread with caution as there is a higher possibility that the index could face some selling pressure at higher levels of around 11800 in the absence of any major cues.

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Monday blues on D-St! It was indeed a volatile day for Indian markets. The index failed to hold on to its crucial level of 11700 on a closing basis

Weak global cues, lingering trade war tension combined with geopolitical risk kept traders on the edge. On the domestic front, delay in the arrival of monsoon and issue related to liquidity and corporate governance weighed on sentiment.

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Investors are advised to tread with caution as there is a higher possibility that the index could face some selling pressure at higher levels of around 11800 in the absence of any major cues.

The next big trigger for markets would be the Budget which is due on July 5

After opening on a weak note, the rupee recovered the lost ground and finally settled 23 paise higher at 69.35 to the US dollar amid a weakening of the greenback against major currencies.

On the provisional front, FPIs were net buyers in Indian markets for Rs 207 crore while DIIs were also net buyers to the tune of Rs 984 crore, provisional data showed.

Big News:

The first six months of 2019 were exciting for equity markets as benchmark indices climbed new peaks during this period. Sensex hit a record high at 40,312 and Nifty surged to its life-high of 12,103 earlier in June.

In the first half of the current year, investors’ wealth grew around 6 lakh crore. The average market capitalisation of the BSE-listed companies grew from Rs 144.48 lakh crore on December 31, 2018 to Rs 150.47 lakh crore on June 21, 2019.

After suffering double-digit cuts in 2018, the S&P BSE Midcap index fell 5.2 percent while the S&P BSE Smallcap index was down 4.2 percent in the first six months in 2019.

But, some stocks outperformed the benchmark and broader indices and turned out to be wealth creators for their investors. More than 100 BSE500 stocks outperformed the benchmark in the first half of 2019.

There are 123 BSE500 stocks that rose 10-50 percent, of which 24 surged over 30 percent in the January-June period in 2019. They include DCB Bank, UPL, Bajaj Finance, PI Industries, JustDial, SRF, Manappuram Finance, SpiceJet, InterGlobe Aviation, Orient Cement and Titan Company, among others.

Technical View:

Nifty formed a bearish candle which also resembles a Spinning Top kind of pattern on daily charts

A spinning top is often regarded as a neutral pattern that suggests indecisiveness in the market. It can be formed in an uptrend as well as in a downtrend.

If the index decisively breaks 11,625, then selling pressure can intensify, experts said. Unless the low of 11,625 is decisively breached on the downside, the current movement of the last two sessions can still be read as a consolidatory move in nature, they say.

Three levels: 11670, 11754, 11800

Max Call OI: 12000, 11800

Max Put OI: 11700, 11500

Stocks in news:

L&T Technology Services: L&T to sell up to 2 lakh shares of company via offer for sale on June 25-26, floor price fixed at Rs 1,650 per share.

State-run power major NTPC June 24 said it has signed an agreement with Power Grid Corporation to form a 50:50 joint venture to enter electricity distribution business and other related activity.

IT services major Tata Consultancy Services (TCS) June 24 said it is increasing its holding to 66 per cent in TCS Japan Ltd - its joint venture with Mitsubishi Corporation (MC) - with an investment of 3.5 billion yen ($32.6 million or Rs 226.2 crore).

Technical Recommendations:

We spoke to Religare Broking Ltd and here’s what they have to recommend:

LIC Housing Finance: Buy| Target: Rs 575| Stop-Loss: Rs 530| Upside 5.5 %

Larsen & Toubro: Buy June Futures| Target: Rs 1610| Stop-Loss: Rs 1505| Upside 4.5 %

Tata Steel: Sell June Futures| Target: Rs 460| Stop-Loss: Rs 505| Downside 6.1%

Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
First Published on Jun 25, 2019 07:12 am
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