Profit booking on 3 June in the last hour of the trade as the S&P BSE Sensex fell nearly 400 points on an otherwise happy day where the stocks had pushed the index up to 34,488 while the Nifty50 witnessed selling pressure near 10,200 levels. The benchmark indices had a happier ending, with the S&P BSE Sensex ending 284 points higher at 34,109 and the Nifty50 up 82 points at 10,061.
Deepak Jasani, Head Retail Research, HDFC Securities, said, “Indian equity markets continued to rise for the sixth straight session on 3 June — the longest winning streak in around seven months. Profit-taking in the last one hour of trade cut the gains to some extent. Markets rose on high volumes and were led by gains in financials, gas distribution, and aviation stocks. Auto, power IT and cement stocks fell,” he said.
Sector-wise, realty, banks, finance, oil and gas, and capital goods stocks stayed busy, with profit-taking witnessed in telecom, power, IT, and metal space.
The NiftyBank rose 2% to 20,940, thanks to gains in Bandhan Bank, PNB, Kotak Bank, RBL Bank, and SBI among others.
In the broader market, the S&P BSE Midcap index was up 0.3%. The S&P BSE Smallcap index went up 1%.
Nestle India, Kotal Bank, Bajaj Finance and M&M were the top Nifty gainers. UPL, ZEE Entertainment, Bharti Infratel, Wipro, and NTPC lost on Nifty the most.
Stocks & sectors
Sector by sector, the S&P BSE Realty index went up 3.07%. Next was the S&P BSE Bankex that ascended 2.07%. The S&P BSE Finance index closed with gains of 1.86%.
However, due to profit-taking again, the S&P BSE Telecom space fell 0.9% as did the S&P BSE Power index, which was down 0.8%. The S&P BSE IT index went down by 0.4%.
There was a 100% volume spike in stocks like Canara Bank, PNB, Adani Enterprises, Adani Power, BEL and Britannia Industries.
The market witnessed a long buildup in stocks like Godrej Properties, InterGlobe Aviation, RBL Bank, HDFC Life and Bajaj Finance. It saw a short buildup in stocks like Tata Power, Torrent Pharma, UBL and Adani Power.
Among more than 50 BSE stocks that hit a 52-week high were Dixon Tech, Britannia Industries, Aarti Drugs, Escorts and Aurobindo Pharma.
Stocks that made the story
As the economy gradually comes out of the coronavirus lockdown, banks and financial stocks gained the highest. Kotak Mahindra Bank, Bandhan Bank, SBI, PNB, and ICICI Bank, which gained 2-3%, grossed the highest.
The Britannia Industries stock closed nearly 2% up after hitting a record high of Rs 3,704.55 per share. The company declared its March quarter results after market hours on June 2.
After Saregama India announced a partnership with Facebook, the music company’s share price was locked in a 20% upper circuit.
Steel Strips Wheels’ share price rose nearly 6% following the company’s act of bagging an export order.
The stock price of InterGlobe Aviation, the owner of IndiGo (airlines), went up 7% despite the company reporting a loss in the March quarter. According to Morgan Stanley, the valuation in the context of earnings potential is attractive.
Tata Motors’ stock was higher by 2% following the company saying that it had resumed operations at all manufacturing plants in the country.
Volatility is likely to continue, experts say, as the Nifty trades near crucial resistance levels. However, there are plenty of stock-specific opportunities, they add. Ajit Mishra, VP−Research, Religare Broking Ltd, told Moneycontrol, “Markets are currently riding on the global buoyancy but the profit-taking in the last hour and scheduled weekly expiry indicate the possibility of a pause on Thursday, that is 4 June.”
“The benchmark may take a breather and see some consolidation before a further surge. Meanwhile, there’ll be no shortage of opportunity on the stock-specific front so plan your trades accordingly,” Mishra said.
The Nifty50 closed in the green for the sixth day in a row. One of the concerns is the mild profit-taking at the top. However, as long as the Nifty holds 9,979-9,950, the upside should continue.
On resumption of the upward trend, the index may come closer to 10,300, say experts.
If the Nifty trades below 9,995, traders are advised to create short positions with a stop above 10,050 on the closing basis. Further, they look for targets close to 9700 levels, says Mazhar Mohammad of Chartviewindia[dot]in. “Contrary to this strength shall resume if the Nifty closes above 10,176 levels and in that scenario, the upswing shall initially get expanded towards 10,350 levels,” he said.