Stock markets languish in negative territory to end marginally lower; IT, realty, power stocks struggle

The benchmark stock market indices closed in the red for the second consecutive day today (June 1). Bank nifty closed the session at 35,620.80 levels after gaining 133.40 points or 0.38 percent. BSE Midcap and BSE Small cap indices ended on mixed note with 0.10 loss and 0.62 percent gain respectively. Among the sectors, pharma, power, realty were the top losers while buying was seen in financials and capital goods names.

Foreign portfolio investors have sold nearly 44000 crore from the domestic market in the last month. As due to inflationary pressure the RBI is bringing down surplus liquidity in the system rapidly. INDIA VIX closed at 20.85 level with 1.81 percent intraday gain.

The benchmark Sensex slipped 185.24 points or 0.33 percent at 55,381.17. The broader Nifty shed 61.70 points or 0.37 percent at 16,522.80. About 1,800 shares have advanced, 1,450 shares declined, and 132 shares are unchanged.

Foreign portfolio investors have sold nearly 44,000 crore from the domestic market in the last month. As due to inflationary pressure the RBI is bringing down surplus liquidity in the system rapidly. INDIA VIX closed at 20.85 level with 1.81 percent intraday gain.

Among sectors Nifty PSU Bank and CPSE ended gaining less than a percent each while Nifty IT, Healthcare and Pharma shed more than a percent respectively. Among Nifty stocks JSW Steel, Coal India, and HDFC Life were the top gainers while Bajaj Auto, Apollo Hospital and Hindalco were the prime laggards.

Nestle India slumped 2.99 per cent to Rs 17238.50. Tech Mahindra dipped 2.86 per cent to Rs 1147.05. Bajaj Finserv slipped 2.63 per cent to Rs 12575. Sun Pharma dipped 2.40 per cent to Rs 839.80. HCL Technologies, Hindustan Unilever, Power Grid Corporation, UltraTech Cement, Infosys and Wipro were among the major Sensex losers.

Only 10 of the 30 scrips that are part of the Sensex closed in the positive. Mahindra & Mahindra rose 1.32 per cent to Rs 1047.50. HDFC rose 0.94 per cent to Rs 2328.85. Kotak Bank, Tata Steel, HDFC Bank, ITC, NTPC and ICICI Bank were among the major Sensex gainers.

Coming to the OI Data , on the call side, the highest OI observed at 16800 followed by 16900 strike price while on the put side, the highest OI was at 16,300 strike price.

Market finds it difficult to find positive triggers

The sharp uptrend seen in the last few sessions is slowly fading away as the market is finding it difficult to find any real positive triggers, said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd. The concern areas like higher inflation, further rate hikes and persistent FII selling will keep the upside capped going ahead and we would continue to see bouts of volatility.

Technically, one more time the Nifty found resistance near 16550. The index has now formed a lower top formation on intraday charts and bearish candle on daily charts, indicating strong possibility of further weakness from the current levels. For traders, 16,450 would act as a strong support level, while there is a strong possibility of a fresh pullback rally if the index succeeds to trade above the same. Above which, it could touch the level of 16,650-16,700. Below 16,450, uptrend would be vulnerable and chances of hitting 16,350-16,325 remains high, said Chouhan.

Om Mehra, Research Associate, Choice Broking, Technically, the index has also formed a bearish candlestick pattern on the daily chart. Fibonacci retrenchment has support around 16,300 levels. Traders may expect range bound movement within 17,250 to 17,700 level. Nifty is sustaining above 21 DMA acting as immediate support as well. Overall Nifty may find support around 16,300 levels followed by 16,250, while on the upside 16,700 may act as an immediate resistance. On the other hand, Bank nifty has support at 34,800 levels while resistance at 36,300 levels.

Prashanth Tapse, Vice President (Research), Mehta Equities Ltd said, Nifty ended on a negative note in a slightly volatile session amid worries of a possible recession, inflation, rising interest rates and FPI outflows. Earlier in the morning trade, Nifty did attract some dip-buying but the optimism led by the easing of COVID-19 lockdowns in China turned out to be short-lived as profit booking turned out to be the preferred theme for the day. Nifty’s rally has hit the pause button, but we believe, the ongoing rebound has a decent chance of lasting.

IT scrips drag market

Benchmark indices made a cautious start amid mixed global market cues, said Mohit Nigam, Head - PMS, Hem Securities. Markets entered green terrain in the late morning session led by strong buying in Metal, PSU and oil and gas scrips. But soon the euphoria faded away as sell off in IT scrips dragged the market into negative terrain below the crucial levels of 16500. Though the markets recovered in the last session and closed above crucial levels of 16500.

On the technical front, the key resistance levels for Nifty50 are 16,700 and on the downside 16,350 can act as strong support. Key resistance and support levels for Bank Nifty are 36,200 and 35,000 respectively, Nigam added.

Rupee surges 18 paise

Rupee surges 18 paise to close at 77.53 (provisional) against US dollar.

Global stocks fall

Global stocks fell and bond yields rose on Wednesday, while the dollar strengthened, as investors fretted over soaring inflation and the impact on global growth from looming interest rate rises. Europe's STOXX 600 index turned negative in morning trading, giving up early gains of 0.3 percent. British stocks fell 0.2 percent.

The dollar index, which measures the currency against six major peers, including the yen, rose 0.2 percent to 102.05, extending a 0.4 percent rally from Tuesday.

(With inputs from Reuters, Agencies)