Podcast | Weak start to June series! Nifty slips below 10,700 levels

Just when we thought that everything is going back to normal after a strong 100-point rally seen on Thursday, bears regained control of D-Street and pushed the index below 10,700 on Friday. For the week, Nifty closed 0.86 points higher for the week ended June 1, 2018.

Better than expected GDP data of 7.7 percent for the March quarter failed to lift investor sentiment as global markets remain subdued as the possibility of fresh imposition of tariffs by the US on steel and aluminium imports on several US allies capped upside.

The S&P BSE Sensex slipped nearly 100 points to close below 35,300 levels. The large part of the pain was felt in the broader market. More than 200 stocks hit a fresh 52-weeks low on the BSE which includes names like ICRA, Ajanta Pharma, Apollo Hospitals, Motilal Oswal, BEML, Aurobindo Pharma, Somany Ceramics, and Century Textiles.

"Markets traded volatile in a narrow range and ended lower, tracking mixed cues. It opened firm, thanks to upbeat GDP data however profit taking gradually pushed the index lower. Besides, continuous decline in broader market was the major dampener which later joined by the select index majors too," Jayant Manglik, President, Religare Broking Ltd told Moneycontrol.

"We're seeing only handful of stocks holding the Nifty while others are struggling in a range or inching lower. Stock selection becomes very difficult in such scenario. We advise keeping proactive approach and prefer only fundamentally sound counters for trading. We expect further consolidation in Nifty within 10550-10850 zone in near term," he said.

The S&P BSE Sensex closed 95.12 points lower or 0.27 percent at 35,227.26 while the Nifty50 ended 39 points lower at 10,696.20.

Sectorally, the S&P BSE Auto index bucked the trend and rose 0.67 percent, followed by the S&P BSE telecom index which gained 0.43 percent, and the BSE Energy index was up 0.18 percent.

On the losing front, the S&P BSE Power index slipped 1.89 percent, followed by the S&P BSE PSU index which closed 1.19 percent down, and the S&P BSE Realty index ended 1.07 percent lower.

The S&P BSE Smallcap index 1.57 percent down while the S&P BSE Midcap index ended 1.01 percent.

Top Sensex gainers include names like Bajaj Auto (up 5.1 percent), Maruti Suzuki (up 3.01 percent), Bharti Airtel (up 2.3 percent), Hero MotoCorp (up 2.1 percent), and Tata Motors (up 1.5 percent).

Top Sensex losers include names like Tata Steel (down 2.6 percent), ONGC (down 2.4 percent), M&M (down 2.3 percent), IndusInd Bank (down 1.7 percent), and NTPC (down 1.6 percent).

Stocks in news

Tata Motors on Friday has registered a strong growth of 58 percent in auto sales for May 2018, driven by solid performance of commercial and passenger vehicles business. The stock closed 1.5 percent higher.

The share price of Bajaj Auto rose 5.1 percent as the company has recorded strong sales numbers for the month of May. The company sold 4.07 lakh units in May 2018, registering a 30 percent growth compared to 3.14 lakh units sold in the corresponding month last year.

Maruti Suzuki India, the leader in passenger vehicles, sold 1,72,512 units in May 2018, registering a massive 26 percent growth year-on-year. The stock rose 3 percent.

ONGC share price fell 2.4 percent after a media report indicated that the company may bear the oil subsidy burden and cash-strapped Venezuela has stopped payments of oil dues to ONGC Videsh.

Shares of ICICI Bank trimmed gains after rallying almost 5 percent in the morning trade on news of MD & CEO Chanda Kochhar going on indefinite leave till the probe is over. But the stock was off the day's high points after the bank denied these reports and said that the executive is on her planned leave. The stock closed 1.3 percent higher.

In other news/Global update

India’s manufacturing sector grew at a weaker pace in May from the previous month, a business survey showed on Friday, while inflationary pressures picked up again amid rising oil prices in another sign that an interest rate hike is around the corner.

The possibility of fresh imposition of tariffs by the US on steel and aluminium imports on several US allies pushed Asian markets in the mixed terrain. Nikkei 225 edged down by 0.14 percent, or 30.47 points, to 22,171.35 and the broader Topix rose 0.1 percent.

Meanwhile, European markets were trading higher as political turmoil in Italy looked to settle down, but trade war fears by the US capped upside. The European Stoxx 600 was up around 0.6 percent.