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Taking Stock | Market squanders day's gains to end flat; auto and metals drag

The policy stance to be adopted by the central banks and US job data will determine the market trends for the coming week

June 03, 2022 / 05:46 PM IST

The Indian equity benchmarks again got caught in the afternoon selling pressure and wiped off the day’s gains to end lower on June 3, with the Sensex down 48.88 points, or 0.09 percent, at 55,769.23 and the Nifty losing 43.7 points, or 0.26 percent, at 16,584.3.

The market opened high following a strong show by US stocks on June 2 led by gains in Tesla, Nvidia and other growth stocks. The S&P 500 climbed 1.84 percent and the Nasdaq gained 2.69 percent, while Dow Jones Industrial Average rose 1.33 percent to 33,248.28 points.

“The late sell-off indicates the lack of confidence in the domestic market driven by the concerns over central bank policy, while in the global market, the investors were waiting for the release of US job data”, said Vinod Nair, Head of Research at Geojit Financial Services.

Profit-booking in the last session amid reports of COVID cases rising to a three-month high in the country wiped off the day’s gains.

Weak cement stocks and talks of weak US payroll data also made investors wary of carrying positions to the next week.

Close

“The RBI is expected to hike rates by 25bps to 35bps and the Fed by 50bps, but the outlook and changes in the economic growth and inflation will determine the market trend. If the central banks decide on a stringent policy tightening, the market mood can swing bearish,” Nair said.

The Sensex, which opened higher, gained 614.54 points to touch the day’s high of 56,432.65 but tanked 713.29 points to slip to an intra-day low of 55,719. The Nifty also had a gap-up opening of 133.65 points or 0.8 percent at 16,761.65.

Stocks & Sectors

IndexPricesChangeChange%
Sensex53,119.2692.29 +0.17%
Nifty 5015,802.052.95 +0.02%
Nifty Bank33,473.45203.55 +0.61%
Nifty 50 15,802.05 2.95 (0.02%)
Thu, Jun 30, 2022
Biggest GainerPricesChangeChange%
HDFC Life552.7011.45 +2.12%
Biggest LoserPricesChangeChange%
Bajaj Auto3,717.00-150.55 -3.89%
Best SectorPricesChangeChange%
Nifty Bank33477.60207.70 +0.62%
Worst SectorPricesChangeChange%
Nifty Metal4695.05-60.35 -1.27%

IT was the only sector to end in the positive zone, while all other sectors wiped off gains to end in the red.

The Nifty IT index was up 0.37 percent, while auto was the top loser to end 1.82 percent down. Metal, banks and realty were down around 1 percent each.

The negative sentiments in the second half of the day hit broader indices as well. The BSE midcap was down 1.45 percent and the BSE smallcap index declined 1.16 percent.

Despite a volatile last session, the India VIX, which indicates the degree of volatility traders expect over the next 30 days, was down 1.69 percent from 20.32 to 19.98.

The biggest Nifty losers were Grasim, UltraTech Cement, Shree Cements, Hero Motocorp and Maruti Suzuki, which lost between 2.78 to 6.5 percent each.

On the winning side, Reliance Industries led the pack along with Infosys, Larsen & Toubro, Sun Pharma and TCS. Each of these stocks gained between 0.5 and 2.03 percent.

Among specific stocks, a long build-up was seen in Metropolis Healthcare, Indiabulls Housing Finance and Reliance, while a short build-up was seen in Ramco Cement, JK Cement and Dalmia Bharat.

Of the 3,466 stocks traded on the BSE, 1,367 advanced, 1,969 declined and 130 stocks remained unchanged.

Outlook for June 6

Shrikant Chouhan, Head of Equity Research Retail, Kota Securities

The market remained erratic this week in the absence of a significant mood event. The Sensex ended at 56,119 on June 3, gaining 2.24 percent during the week, while the Nifty was at 16,931, a gain of 1.95 percent during the week.

In the midst of global chaos and conflicts, one thing that is uniting the countries is inflationary pressures and following interest rate hikes.

This week central banks of various countries have resorted to an increase in benchmark interest rates. In the US, investors will wait for the jobs data for May expected later in the day.

Economists see 328,000 jobs added in May, down 100,000 from April, according to a Dow Jones survey. Consensus estimates call for wages to rise by 0.4 percent, a faster pace than April’s 0.3 percent increase.

The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, known as OPEC+, agreed to raise output by 648,000 barrels per day (bpd) in July and 648,000 bpd in August. Russia’s onslaught in Ukraine is also front and centre, as well as the recent EU announcement of a partial ban on Russian oil imports.

Ajit Mishra, VP-Research, Religare Broking Ltd

Markets settled marginally lower in a volatile trading session amid mixed cues.

The recovery in the global indices combined with bargain hunting on the domestic front has helped the Nifty witness a rebound recently. However, this move lacks decisiveness due to lingering issues like inflation, geopolitical tension, etc.

We recommend booking profit on the rise, citing a strong hurdle at 16,900 in the Nifty and waiting for further clarity. Stocks, on the other hand, are offering opportunities on both sides so traders should align their positions accordingly.

Going ahead, apart from the global cues, the upcoming RBI monetary policy meet and monsoon progress will be in the focus for cues.

Disclaimer: The views and investment tips of investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Disclosure: MoneyControl is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.
Gaurav Sharma
first published: Jun 3, 2022 05:03 pm
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