Closing Bell: Nifty ends below 18,600, Sensex falls 223 pts; capital goods outshine

Taking Stock: Nifty below 18,600, Sensex falls 223 points; PSU banks worst hit

For the week, Sensex and Nifty added 78 and 29 points, respectively.... Read More

The Bank Nifty index is currently experiencing selling pressure as the bears maintain their control at higher levels. The resistance zone between 44300 and 44500 has proven to be strong, preventing the index from making significant upward moves.

On the downside, there is a support level at 43700, which has the potential to act as a buying opportunity. If the index manages to hold above this support level, it could attract buyers who see it as a favorable entry point.

It is important to monitor the price action around these key levels, as a break above the resistance zone or a breach below the support level could indicate a potential change in the market sentiment and trigger further directional moves.

Markets edged lower and lost nearly half a percent, in continuation to the previous session’s fall. After the flat start, the Nifty gradually inched lower as the day progressed and finally settled around the day’s low at 18,563.40 levels. The majority of sectors aligned with the benchmark move and ended lower wherein IT, FMCG and auto were among the top losers. The broader indices too witnessed profit taking and settled marginally in the red.

Indications are pointing towards a further slide in the Nifty index however downside also seems capped citing support at 18,400 levels. We recommend focusing more on position management during the corrective phase and preferring sectors/stocks that are showing relatively higher strength.

Nifty opened on a flattish note and then started drifting as the day progressed. Once it closed below the previous breakout of 18630-18650, it was seen getting under incremental pressure and closed near the low point of the day. Bearish divergences in RSI and made on the daily timeframe ensured that any rise was met with rejections resulting in previous low getting violated. The next support in Nifty is seen at the 18440-18450 zone where the 21ema on the daily chart is placed.

Unlike Nifty, the trend in Bank Nifty was majorly flat with incremental volatility. The index was seen hovering around the swing break level of 44160 with price closing above and below it for a couple days. So far the index is trading in 43700-44300 range and a close breaking either of these data points is likely to decide further orientation in Bank Nifty. 43700 will be a key support area as 21ema on daily chart is placed at that level which has lent support to the index since April 2023.

The domestic market witnessed extended selling pressure as investors eagerly awaited the domestic inflation data due on Monday as the RBI refrained from an aggressive cut in their inflation forecast. The market is hopeful that the CPI inflation for May will further moderate from its current level of 4.7%. In addition to the domestic factors, global cues also failed to provide support, as the US reported high unemployment claims ahead of the release of the inflation figures and the Fed meeting.

Indian rupee ended 11 paise higher at 82.46 per dollar against previous close of 82.57.

Indian benchmark indices ended lower for the second consecutive session on June 9 with Nifty below 18600.

At close, the Sensex was down 223.01 points or 0.35% at 62,625.63, and the Nifty was down 71.10 points or 0.38% at 18,563.40. About 1705 shares advanced, 1727 shares declined, and 107 shares unchanged.

Top losers on the Nifty were Hero MotoCorp, Divis Laboratories, Tata Steel, HDFC Life and Eicher Motors, while gainers included IndusInd Bank, Axis Bank, L&T, Adani Enterprises and Power Grid Corporation.

Among sectors, capital goods rose 1 percent, while FMCG, PSU Bank, Information Technology, metal and oil & gas down 0.5-1%.

The BSE midcap and smallcap indices ended flat.

Exclusive: Concor strategic sale at ‘status quo’ as railways raises concerns: Official

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Maruti Suzuki India has introduced the All-New Tour H1 – India’s most fuelefficient entry level commercial hatchback. With the latest generation of Alto K10, the All-New Tour H1 offers fresh new exteriors, spacious interiors, enhanced comfort, convenience and safety features.

Maruti Suzuki India was quoting at Rs 9,628.95, down Rs 25.90, or 0.27 percent.

Q4FY23 domestic revenues of capital goods companies showed decent yoy growth, despite moderation in the case of L&T. Order inflows have increased a massive 69% yoy and 17% on a 4-year CAGR basis especially from companies such as ABB and Siemens, which would suggest a strong pickup in order inflows from the manufacturing sector.

In addition, larger outlay by the central government in FY24BE on capital expenditure is a positive for the infrastructure sector, although the slowdown in capital expenditure by states is a dampener.

Most capital goods and infrastructure stocks are trading at higher multiples compared to their pre-Covid levels. We are positive on the long-term prospects of the sector, but the sharp increase in stock prices makes us nervous about any disappointments, leading to a correction in multiples.

We like Cummins India (Buy, Fair Value Rs 1860) and Praj Industries (Buy, Fair Value Rs 450) in the space.

Indian Rupee appreciated today on weak US Dollar and decline in crude oil price. FII inflows also supported Rupee while weak domestic equities capped sharp gains. U.S. Dollar declined after weekly unemployment claims fell to a year and half low at 261,000 vs. 233,000 in the previous week. This raised expectations of a pause in rate hike by US Federal Reserve in its June FOMC meeting.

We expect Rupee to trade with a slight positive bias on weakness in US Dollar and a hawkish tone by the RBI in its monetary policy yesterday. However, weak domestic markets and concerns over global economic slowdown may cap sharp upside. Market participants may also remain cautious ahead of US inflation data and FOMC meeting outcome next week. We expect USDINR spot to trade in between 82 to 82.80 in the near term.