Stocks attempted to test higher levels a day ahead of RBI's monetary policy and strength across Asian markets, taking the benchmark Nifty 50 index above 24,700 supported by Reliance Industries and private banking shares on June 5.
At close, the Sensex was up 443.79 points or 0.55 percent at 81,442.04, and the Nifty was up 130.70 points or 0.53 percent at 24,750.90. The BSE Midcap index rose 0.4 percent while the Smallcap index added 0.65 percent.
Buying across the sectors - barring PSU Banks - helped indices extend gains for a second day ahead of Reserve Bank of India (RBI) MPC decision tomorrow, where a 25 bps rate cut is widely expected.
Also Read: Factors behind the market rise
The biggest Nifty gainers included Eternal, Dr Reddy's Labs, Trent, Power Grid Corp, ICICI Bank, while losers were IndusInd Bank, Bajaj Finserv, Axis Bank, Tata Consumer, Bajaj Finance.
Except PSU Bank, media, auto, all other sectoral indices ended in the green with IT, metal, pharma, realty up 0.5-1.7 percent.
Asian equities ended higher with Kospi and Hang Seng indices added a percent each, while European shares were trading positive tracking ECB's policy decision.
More than 100 stocks on the BSE touched their 52-week highs, including Welspun Corp, MCX India, Fortis Healthcare, Lloyds Metals, Anupam Rasayan, SRF, Garden Reach, Solar Industries, Bharat Electronics, APL Apollo, GlaxoSmithKline Pharma, Intellect Design, Hitachi Energy, Authum Investment, among others.
In stock specific action, Welspun Corp shares jumped more than 5 percent on repeat export order for supply of 50 kms of LSAW Pipes and Bends, Dr. Reddy’s shares added 3 percent on collaboration with Alvotech to co-develop biosimilar candidate to Keytruda. Angel One share price rose 4 percent as number of orders jumped 14%, MoM. Deccan Gold Mines shares surged more than 9 percent on consent to operate from APPCB.
Railtel Corporation shares gained 4 percent on LoI of Rs 274 crore from Motor Vehicles Department, Maharashtra. Garden Reach Shipbuilders & Engineers (GRSE) climbed to fresh record high on signing MoU with Hamburg-based Carsten Rehder for the potential construction of four multi-purpose cargo vessels.
Outlook for June 6
Aditya Gaggar Director of Progressive Shares
On the weekly expiry day, the market witnessed significant volatility marked by sharp swings on either side. Following a strong start, Nifty50 strengthened its positive momentum but once again struggled to sustain at higher levels and erased half of its gains to conclude the day at 24,750.90 with gains of 130.70 points. Except for PSU Banks, Media and Auto, all the other sectors ended in green, with Realty and Pharma being the top performers. Midcap and Smallcap segments extended their outperformance by surging 0.65% & 0.96%, respectively.
Technically, the Index formed a spinning top candle, indicating volatility with uncertainty about the clear trend ahead of the MPC meeting. The key resistance and support levels are 24,900 and 24,500, respectively.
Rupak De, Senior Technical Analyst at LKP Securities
The index remained volatile within a range throughout the day, failing to establish a clear directional move as range-bound trading continued. However, a golden crossover is visible on the daily chart, indicating the potential for a strong uptrend in the short term.
On the 2-hour chart, the RSI has formed a positive crossover, suggesting bullish momentum in the near to short term. Support continues to hold at 24,500; unless the Nifty breaks below this level, a serious correction is unlikely. On the contrary, a steady or even sharp recovery appears possible in the near term.
Ajit Mishra – SVP, Research, Religare Broking
Markets witnessed volatility on the weekly expiry day but managed to close in the green. A lack of strong cues from global markets led to a flat start for the Nifty, followed by a swift recovery in the first half. However, profit-taking in the latter half significantly trimmed the gains, and the index finally settled at the 24,750.90 level.
Meanwhile, there was no dearth of stock-specific trading opportunities, thanks to the mixed sectoral trend. On one hand, realty and pharma posted decent gains, while auto and banking ended on a subdued note. The broader indices continued to outperform, gaining in the range of 0.6% to 0.9%.
With all eyes now on the outcome of the upcoming MPC meeting, the continued outperformance of rate-sensitive sectors such as banking, realty, and auto appears to be factoring in a 25 bps rate cut. However, the RBI’s commentary will be crucial, given the mixed global cues amid a favorable domestic environment.
On the index front, the Nifty has reclaimed its short-term moving average (20-DEMA), and its ability to sustain above this level will be critical for any further rebound. Otherwise, profit-taking may resume. We continue to recommend a focus on theme-specific opportunities while maintaining prudent position sizing due to the mixed market signals.
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