Taking Stock: Profit booking hits D-Street; Sensex falls over 500 points, Nifty holds 10,300

Indian markets snapped their four-day winning streak and closed in the red on June 24. The S&P BSE Sensex plunged more than 500 points while the Nifty50 managed to hold onto 10,300 levels.

Let’s look at the final tally on D-Street: the S&P BSE Sensex fell 561 points to 34,868 while the Nifty50 closed with losses of 165 points to 10,305.

The Nifty, which started on a positive note, gave up most of the gains and closed in the red as coronavirus infections continue to rise globally.

The Nifty, which reclaimed its 200-DMA placed at 10,522, saw profit-taking at higher levels ahead of the monthly F&O expiry, say experts.

“Markets settled with a cut of over one and a half percent, taking a breather after the recent rally. Initially, the benchmark opened higher, taking cues from firm global cues but profit-taking gradually pushed the index lower as the session progressed,” said Ajit Mishra, VP - Research, Religare Broking Ltd.

“The existence of major hurdle at 10,550 (200 EMA) in the Nifty combined with caution ahead of the monthly derivatives expiry pushed the bulls slightly on the back foot. Finally, the Nifty index ended near the 10,300 mark.”

Sectorally, profit-taking was visible in banks, telecom, finance, realty, and power stocks while some buying was seen in the FMCG space.

Broader markets marginally outperformed the benchmark indices. The S&P BSE Midcap index was down 1.08 percent while the S&P BSE Smallcap index slipped 1.24 percent.

Top Nifty gainers included Eicher Motors, Hero MotoCorp, ITC and Asian Paints.

Top Nifty losers included Hindalco, Power Grid, IndusInd Bank and ICICI Bank.

Stocks & Sectors

Sectorally, the S&P BSE Bankex fell 4.08 percent followed by the S&P BSE Telecom index which was down 3.1 percent. The S&P BSE Realty index fell 2.7 percent.

A volume spike of more than 100 percent was seen in Shriram Transport, RBL Bank, GAIL India, Asian Paints and Jindal Steel.

Long Buildup was seen in stocks like Escorts, Berger Paints, GAIL India and Asian Paints.

Short Buildup was seen in stocks like Tata Power, ONGC, Amara Raja Batteries and DLF.

More than 100 stocks hit a fresh 52-week high. These included Dixon Technologies, Swaraj Engines, Ruchi Soya and Escorts.

Stocks in news

Asian Paints jumped over 3 percent after CLSA maintained an outperform call on the stock with the target at Rs 1,710 per share. Credit Suisse also maintained an outperform call on the stock with the target at Rs 1,850 per share.

Bank of Baroda share price was up 2 percent after the public sector lender reported a profit in Q4FY20. The bank reported a profit of Rs 506.6 crore for the quarter supported by lower provisions, higher operating income and tax write-back.

JMC Projects shares were up over 13 percent after the company said it secured new orders worth Rs 938 crore.

India Cements stock shed over 3 percent after the company reported a consolidated net loss of Rs 11.76 crore for the fourth quarter ended March 31, 2020.

GAIL India shares were up 3 percent after the company reported a 168.9 percent year-on-year growth in standalone profit for the quarter ended March 2020 driven by tax write-back and strong operating performance.

Balrampur Chini shares were down over 3 percent after the company's operating profit declined 6.6 percent YoY to Rs 241 crore, largely hit by a decline in power revenues.

Technical View

The Nifty formed a bearish candle on the daily charts, also known as the Bearish Engulfing pattern.

The pattern suggests that a reversal could be in the offing; however, a confirmation is required with a follow-through selling below 10281 levels in the next trading session, say experts.

A close below 10,281 could take the Nifty towards 10040 kinds of levels where there seems to be a confluence of support points, says Mazhar Mohammad of Chartviewindia.in said.

In case the selloff was just a reaction to global cues, then the Nifty needs to get past 10,553 levels to reinstate its bullish undertone, till then, the trajectory of this market shall remain in southern direction, he said.

Positional traders with a high-risk appetite should take short side exposure through put options and should also make use of rallies to create short positions with a stop above 10,553 levels, he said.