Today’s Market Summarised

The day of the reversal? After retouching a new high of 15,800 in the day, Nifty and the rest of the market fall sharply.

Nifty opened the day at 15,769 and moved down. But just after the fall, it recovered and even moved up till 15,800. But from here, the profit booking started. And what a fall across the whole market! The index fell to 15,600 and took support, then once again broke this level.

Nifty gained back some losses to close at 15,635, down 104 points or 0.67%

Bank Nifty opened the day at 35,130 and moved down even breaking 35,000. But from here, the index gained back and went up 500 points in 30 minutes. In the afternoon fall, a low was made near 34,640. Bank Nifty closed the day at 34,800, down 284 points or 0.81%.

All sectoral indices closed in the red with Nifty Media(-2.1%), Nifty Realty(-1.66%), Nifty Auto(-1.28%) leading the fall. Interestingly, Bank Nifty and Fin Nifty both fell less than 1%.

Asian markets mostly closed in the red today. European markets are all trading in the red.

News Picks

With many positives going for them, power companies once again rallied in the day. Adani Power closed flat after being 10% up. Tata Power(+6.5%), REC(+6%), PFC(+3.73%) saw huge buying in the day.

Tata Power has entered Odisha by purchasing 51% stake each in three power utilities in Odisha. This has been cleared by the fair trade regulator Competition Commission of India. The stock was 14% up in the day, and closed 6.5% up.

Power Grid commissioned India’s first Voltage Source Converter (VSC) based HVDC (high voltage direct current) electricity transmission system. The stock closed 3.44% up as Nifty’s top-gainer. Among other power companies, NTPC gained 1.64%.

Crompton Greaves moved up in the morning after 3.37 crore shares changed hands in a block deal. The stock closed 4% up.

Tata Motors sent an internal memo to its dealer partners to stop taking orders for all diesel variants of Nexon. The stock closed 2.6% down

Indian steel export enquiries rise on rumours of china export tax of 10-15% on steel. SAIL closed 2.4% up. Other steel stocks were up, but fell along with the market,

India has applied for an ‘exclusive trademark’ that would grant it sole ownership of the Basmati rice title in the European Union.

GAIL closed 3% down after profit numbers missed estimates. Q4 standalone net profit stood at Rs 1,910 crores, up 28% compared to last quarter. Says executing 71 projects with Rs 47,500 crores estimated investment. 

The Government is reportedly set to allot 700 MHz band airwaves to railways. RailTel shot up near close and ended at 10.6% up. Keep note that the band is used for 5G.

Petronet LNG opened with a gap-down after reporting profit numbers yesterday. But a further fall was seen after the CEO said that the deal with US energy company Tellurian’s LNG project for gas supplies for 40 years has lapsed. The stock fell 8%.

Star Cement reported Q4 standalone net profit at Rs 62.1 crores, up 195% from last quarter and 3% YoY. The stock closed 3.4% down.

INOX Leisure approved the opening of QIP on June 8. The floor price of Rs 315.25 per equity share is at a discount of 5.62% to Tuesday’s closing price. The stock fell 2% down

Markets Ahead

The big fall seen in the market afternoon was most likely institutional selling. Almost every major stock across every sector fell as profits were booked. Even with this, Nifty managed to close above 15,600, down by just 0.7%. Even Bank Nifty was down only 0.8%.

But unlike last few days when Nifty ended in red, Nifty Midcap and Smallcap also fell. With this, the current cycle of the market rally is expected to turn into consolidation.

Mutual Fund Data for May has been published. ETF inflow stands at Rs 5,379.8 crores vs Rs 2,537 crores inflow. Equities see inflows for the 3rd straight month with at Rs 9,235.5 crores, the highest since March 2020. A net outflow of Rs 44,512 crores was seen in Debt funds vs Rs 1 lakh crores inflow. All data is month on month.

This data shows that more funds are flowing in from debt markets to equity, expecting markets to be stable from now. Even with today’s fall, India VIX is under 15. That means we may see some healthy corrections but not huge falls as Mutual Funds houses(DIIs) will support the market.

With the weekly expiry being tomorrow, we can expect more volatile consolidation. Open Interest shows a support zone at 15,500 with good resistance at 15,700 for tomorrow so there is potential for some downside move as well. 

Anyway what we can understand is that the next rally to 16,200 and above will take some time. A healthy and steady move with corrections here and there is more likely to be sustained than a straight rally.

Hope you had a great day in the market!

Catch you all on The Stock Market Show tonight!