Closing Bell: Nifty at 18,500, Sensex gains 629 pts; all sectors in the green

Taking Stock: Market on 5-month high, Sensex zooms 629 points, Nifty at 18,500

All sectoral indices ended in the green, with metal, FMCG, information technology, realty, pharma and PSU Bank rising a percent each

Markets edged higher on Friday and gained nearly a percent, making a strong start for the June expiry. The buying was witnessed across the sectors wherein FMCG, IT and realty were among the top gainers. Consequently, Nifty settled around the day’s high at 18,499.35 levels. Meanwhile, the buoyancy continued on the broader front and the midcap index made a new record high as well.

The tone was positive in the index amid consolidation and now recovery in the US markets combined with improved participation from the IT sector has provided the needed trigger. Besides, a strong surge in heavyweights like Reliance further added to the positivity. Since Nifty has decisively crossed 18,400 levels, we are now eyeing 18,700 to be tested shortly. Traders should align their positions accordingly.

The markets remained quite bullish, more or less insulated from developments elsewhere. The uptick seen during the week was across market caps and sectors. The prolonged negotiations in the US on the budget ceiling is being looked at with some amount of consternation as the consequences may be devastating if an agreement is not reached. But the probability of an agreement being hammered out is very high.

Other significant influences on the market would be the economic numbers as well as speculations on the intensity of the economic slide that is likely to happen in the coming quarters. External developments will be of consequence to the markets in the coming weeks more than any domestic event.

Nifty rose sharply on May 26, closing near the intra-day high. At close, Nifty was up 0.97% or 178.2 points at 18499.4. Broad market indices rose less than the Nifty even as the advance decline ratio rose to 1.39:1.

World markets were mixed on Friday, amidst optimism that Congress and the US President will strike a deal to unlock a vote for lifting the U.S. government’s debt ceiling and avert a potentially disastrous default although growing concerns over a slowing global economy restrained investors.

The Indian Meteorological Department has retained its forecast of a normal monsoon even as it expects 'below normal' rainfall in June. The southwest monsoon seasonal rainfall over the country as a whole is likely to be 96% of the long-period average with a model error of +/-4%, officials from the IMD said in its second forecast for the year on Friday. The 2023 June rainfall averaged over the country as a whole is most likely to be below 92% of LPA, according to the IMD.

Nifty gained 1.63% over the week helped by a 0.97% rise on Friday. Upmove on Friday showed strength with wider participation. Nifty could now trade in the 18660-18393 band over the near term.

The Nifty has finally decisively broken out of the sideways consolidation on the upside. After two weeks of consolidation the Nifty has once again resumed its upmove. This breakout is likely to be a broad-based rally and we expect participation from all sectors hereon.

On the upside, we expect the Nifty to target levels of 18800 which is the 161.82% Fibonacci extension level of the five wave rise (18060 – 18420) on the hourly charts. The hourly momentum indicator has a positive crossover, and the daily momentum indicator is on the verge giving a positive crossover. Thus, both price and momentum indicator suggest that the positive momentum is likely to continue. Overall, from short term perspective we change the outlook to positive for target of 18800.

Bulls have taken control of the Indian equities market, as the Nifty has experienced a consolidation breakout on the daily chart. The rally has been supported by the strength in Reliance, ITC, and IT stocks. The Nifty has been sustaining above a critical moving average, indicating a strong position.

The trend is expected to remain positive as long as the index sustains above the support level of 18400. On the higher end, there is a resistance level at 18700.

Nifty opened on a positive note taking cues from a strong US market and gained momentum as the day progressed. Not only did it hold above 18400 level with relative ease but managed to close well above the previous swing high of 18460. RSI is inching towards 70 which if sustained can give a fresh push to Nifty.

18400 put option has witnessed significant intraday selling implying a robust upside towards 18650 can be seen as long as 18400 is protected.

Banknifty has managed to consistently close above its 10 DMA even when Nifty closed below its 10 DMA for a couple of trading sessions. However, Banknifty is yet to cross its immediate hurdle of 44160 levels whereas Nifty has closed well above its hurdle. A strong upside till 45000 can be seen once it confirms a breakout after closing above 44160 levels.

Bulls have taken control of the Indian equities market, as the Nifty has experienced a consolidation breakout on the daily chart. The rally has been supported by the strength in Reliance, ITC, and IT stocks. The Nifty has been sustaining above a critical moving average, indicating a strong position.

The trend is expected to remain positive as long as the index sustains above the support level of 18400. On the higher end, there is a resistance level at 18700.

Despite weak cues from global markets, the domestic market defied the trend and experienced a widespread rally, driven by the strong growth forecast for the Indian economy.

With the upcoming Q4 GDP data, it is anticipated that India's FY23 GDP will marginally surpass the earlier projected 7.0% growth rate. Additionally, the expectation of a normal monsoon and consistent FII buying further boosted confidence among domestic investors.

Indian rupee closed 18 paise higher at 82.56 per dollar against previous close of 82.74.

Benchmark indices ended higher on the first day of the June series with Nifty at 18,500.

At close, the Sensex was up 629.07 points or 1.02 percentat 62,501.69, and the Nifty was up 178.10 points or 0.97percentat 18,499.30. About 1,879 shares advanced, 1,503 shares declined, and 138 shares were unchanged.

The biggest gainers on the Nifty included Reliance Industries, Sun Pharma, Divis Labs, HUL and Hindalco Industries, while losers were ONGC, Grasim Industries, Bajaj Auto, Bharti Airtel and Power Grid Corp.

All sectoral indices ended in the green with Metal, FMCG, Information Technology, Realty, Pharma and PSU Bank up 1 percent each.

The BSE midcap index added 0.8 percent and the smallcap index was up 0.5 percent.

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