Benchmark equity indices Nifty and Sensex rebounded on June 5 as two key allies pledged their support to form a new government with the BJP, giving investors confidence in political stability and continuity.
Both frontline indices plunged around 6 percent on June 4, posting their worst day in over four years in the previous session as a narrow win for BJP-led NDA raised concerns about policy continuity.
At close, the Sensex was up 2,303.19 points or 3.20 percent at 74,382.24, and the Nifty was up 735.80 points or 3.36 percent at 22,620.30. About 2331 shares advanced, 1,022 declined, and 76 were unchanged.
Biggest gainers on the Nifty included Adani Ports, IndusInd Bank, Hindalco, Tata Steel and M&M, while losers were L&T and BPCL.
Also Read | Closing Bell: Nifty above 22,600, Sensex gains 2,303 pts; all sectors in the green
All sectoral indices ended higher with Nifty Private Bank soaring over 5 percent. Nifty Auto, Bank and FMCG indices gained over 4 percent each and other sectoral indices also rose up to 3 percent.
The BSE Midcap index rallied over 4 percent and smallcap index gained 3.9 percent. The Nifty Midcap index registered its biggest single-session gain in terms of absolute points.
In today's upmove, investors' wealth went up by around Rs 13 lakh crore, as the market capitalisation of BSE-listed companies rose to Rs 407.58 lakh crore lakh crore, from Rs 395.99 lakh crore in the previous session.
Outlook for June 6
Mandar Bhojane, Research Analyst, Choice Broking
The sharp rebound in the second half of the session, closing above the 22,600 level, indicates a potential bullish reversal. If the price closes above the 22,800 level, it could potentially rise to 23,000 and above in the coming days. On the downside, 22,000 and 21,800 will act as immediate support levels.
According to the options data, the highest open interest (OI) on the call side is at the 22,800 strike price, followed by the 23,000 strike price. On the put side, the highest OI is at the 22,200 strike price.
Rupak De, Senior Technical Analyst, LKP Securities
Nifty has shown a sharp recovery, rebounding to touch its 100-day moving average placed at 21786 and closing above its 21-day EMA. For a bullish or bearish outlook, it's crucial to monitor key levels. If Nifty sustains above its 21-day EMA or 22500, a buy-on-dip approach is advisable.
Currently, 22,400 acts as support, while 22,800 serves as the initial resistance for the Nifty index.
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The Bank Nifty index saw a sharp recovery from its 200-day moving average, closing above its rising trendline and 21-day EMA. This suggests a buy-on-dip strategy with a stop-loss at 47500. The immediate support level is 47,800, while resistance is at 49,500.
Ajit Mishra – SVP, Research, Religare Broking Ltd
With the major event now behind us, we anticipate a gradual reduction in volatility. The index rebound is encouraging, but sustaining above the 22,600 level is crucial for a move towards 23,000 for Nifty.
Conversely, the 21,800-22,000 range should provide support in case of profit-taking. We continue to favor defensive sectors such as FMCG, IT, and pharma, and recommend being selective in other sectors.
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