Closing Bell: Nifty above 18,500, Sensex gains 119 pts; auto, realty, metals outshine

Taking Stock: Market ends with moderate gains amid volatility; realty, auto, metals gain

For the week, the Sensex as well as the Nifty ended on a flat note... Read More

Nifty ended marginally in the positive after a highly volatile trade on June 02. At close, Nifty was up 0.25% or 46.4 points at 18534.1. Volumes on the NSE were a little above recent average. Broad market indices gained more than the Nifty once again even as the advance decline ratio remained firm at 1.82:1.

Global stocks rose on Friday as sentiment was lifted by signs the US Fed will skip a rate hike at its next meeting and the approval of U.S. debt ceiling legislation.

Nifty nudged back into green again and again on Friday despite selling pressure in select large caps. On a weekly basis, Nifty rose 0.19% forming a high wave type of candle. As long as the Nifty stays above 18315, bulls may have an upper hand. On upmoves, 18662-18729 could offer resistance. A lot of near term concerns for the markets globally are out of the way.

The equity market has been holding quite well buoyed by the better than expected national income data, encouraging manufacturing PMI, and finally, a closure to the US debt ceiling discussions. The positive sentiment created by these events may linger on for some more time. However, in the immediate term one should be cognizant of the high probability for exports to slowdown with almost all auto companies reporting a decline in the exports component, and a slowdown in FPI flows if the strength in the US unit endures.

The Indian rupee registered the biggest weekly gains in the past six weeks following foreign fund inflows, better-than-expected domestic economic data and profit booking in the greenback after the US government raised the debt ceiling.

Technically, spot USDINR has broken the support of the 20-day moving average but manages to float above the 100-day simple moving average. In the near term, it has support at 82.25 and resistance at 82.75.

Markets remained range bound for yet another session and ended marginally higher. Initially, upbeat global cues triggered a gap-up start in Nifty but profit taking pared all the gains in no time. It rebounded again as the day progressed but couldn’t surpass the day’s high and finally settled at 18,534.10 levels. Meanwhile, a mixed trend on the sectoral front kept the traders busy wherein realty, metal and auto posted decent gains. The broader indices maintained their positive tone and gained nearly half a percent each.

Mixed global cues combined with a lack of decisiveness in the banking pack are causing uncertainty. However, rotational buying in other sectors and outperformance of the broader indices are helping the traders to put on a brave face. Amid all, we recommend maintaining a stock-specific approach and waiting for clarity.

This week the Indian market was volatile, however it was able to regain the momentum led by positive domestic outlook accompanied by global cues. Auto stocks garnered attention as sales numbers for May came in strong, with a sequential recovery boosting sentiment across the sector. The hope that the Fed will refrain from a rate hike has provided comfort to the global equity market.

The Nifty opened on a positive note today and witnessed rangebound price action. It closed with gains of ~45 points. On the hourly charts we can observe that the Nifty is trading around the lower end of the reverse channel (18500 – 18450) and the key hourly moving averages and the hourly momentum indicator has triggered a fresh positive crossover which is a buy signal.

After a gap up opening on Monday this week Nifty has spent most of the time digesting those gains. It has filled the gap (18500 – 18580) area created on the 29th May and in the process retested the range breakout of 18000 – 18400.

We believe that the Nifty this week has witnessed consolidation and next week onwards we are likely to witness resumption of uptrend. Overall, we continue to maintain our positive outlook on the index for a target of 18800 from short term perspective.

In terms of levels, 18460 – 18420 shall act as the crucial support zone while the hurdle zone is placed at 18600 – 18660.

Indian rupee ended higher by 11 paise at 82.30 per dollar against previous close of 82.41.

Benchmark indices ended with marginal gains in the highly volatile session on June 2.

At close, the Sensex was up 118.57 points or 0.19% at 62,547.11, and the Nifty was up 46.30 points or 0.25% at 18,534.10. About 2115 shares advanced, 1333 shares declined, and 124 shares unchanged.

Top gainers on the Nifty included Hindalco Industries, Apollo Hospitals, Hero MotoCorp, Tata Steel and JSW Steel, while losers were Adani Enterprises, Infosys, BPCL, HDFC Life and TCS.

Among sectors, realty, auto metal added 1 percent each, while selling was seen in the IT and oil & gas names.

The BSE midcap and smallcap indices rose 0.5% each.

Comex Spot gold prices traded up on Friday, with spot gold price at Comex was trading higher by 0.06% at $1978.80 per ounce. While Gold August future contract at MCX was trading up by 0.05% at Rs 60250 per 10 grams by noon session.

Gold prices advanced in Asian trading hours on Friday. Yellow metal rallied as sentiments improved after dovish comments from Philadelphia Federal Reserve President Patrick Harker argued that U.S. central bankers should not raise interest rates at their next meeting even though high inflation is coming down at a "disappointingly slow" pace. Markets now see a 77.2% chance of rates remaining unchanged in the June meeting. Meanwhile, dollar index and bond yields retreated from recent peak, dollar index was down by 0.73% and settled at 103.56 level in the previous session.

Weakness in US dollar and expectation of a pause in the U.S. Federal reserve policy tightening campaign boosted precious metals’ appeal. Comex spot gold is likely to find buyers in the range of $1965/$1950 per ounce and while $1995/$2009 per ounce is the resistance for the day. MCX Gold August future likely to find support at Rs 60080/59700 per 10 gram and resistance at Rs 60580/60750 per 10 grams.

Nirmal Bang expects revenue/EBITDA/PAT CAGR of 13.4 percent/22.4 percent/26.8percentover FY23-FY25E with a margin improvement of 360bps. Future growth strategy will revolve around: (1) Increased covered marketpresence, especially in the Chronic segment (2) Gaining scale in the Consumer Health business (3) Increasing penetration in Metro and Class-I cities and (4) Increasing doctor engagements,especially the specialists.

We estimate healthy free cash flow (FCF) generation of ~Rs 32 billion over FY24E-FY25E with low capex requirements.

ROE and ROCE are expected to remain healthy at 21.1percentand 20.1 percent, respectively by FY25E.

The broking firm initiates coverage on Mankind with an Accumulate recommendation and a target price (TP) of Rs 1,440, valuing it at 28x March’FY25E EPS.

Toyota Kirloskar Motor (TKM) announced the signing of a Memorandum of Understanding (MOU) with Bajaj Finance Limited to provide enhanced retail finance options that are specially designed to make the process of purchasing a Toyota vehicle more convenient and accessible to customers.

At 15:15 hrs Bajaj Finance was quoting at Rs 7,020.00, down Rs 20.80, or 0.30 percent.