Profit booking at 40K limit upside; keep an eye on inflation data

Sensex and Nifty again failed to hold 40,000 and 12,000, respectively, on June 11 due to profit booking as soon as the indices hit those milestones.

In terms of sectors, metals took the lead, followed by oil & gas and banks. Banking heavyweights led Nifty and Nifty Bank higher. The Nifty Bank closed 231 points higher or 0.75 percent, led by gains in Bank of Baroda, Yes Bank, IndusInd Bank, Federal Bank and PNB.

Amongst the broader market indices, BSE Midcap and BSE Smallcap closed higher by 0.8 percent and 0.3 percent, respectively.

The final tally on D-Street – the S&P BSE Sensex rose 165 points to 39,950 while the Nifty50 closed 42 points higher at 11,965.

Banking stocks lend support to benchmark indices after a report suggested that the non-performing assets (NPA) have declined massively to 9.3 percent in March 2019, much faster than the Reserve Bank’s estimate and steeply down from 11.5 percent the year before.

The report comes at a time when most banks are at the cusp of an end of the NPA pains after a prolonged period and are concentrating on the resolution now.

“Positive momentum was triggered due to the report. Still, the broad trajectory of the market remains indecisive and awaits fresh triggers in this expensive valuation,” Vinod Nair, Head of Research, Geojit Financial Services Ltd told .

“News of government stimulus in China boosted Asian and European equities while trade war concerns have also subsided marginally. Further tension can emerge ahead of the G20 meet this month given the war of words exchanged between China and the US,” he said.

Investors will watch out for macro data on June 12. Macro-economic data (Inflation and IIP) scheduled this week will be crucial for market movement as RBI recently raised its inflation range and indicated towards concern on industrial growth, suggest experts.

Top Sensex gainers: Tata Motors DVR (up 4.3 percent), Tata Motors (up 2.7 percent), and ONGC (up 2.5 percent).

Top Sensex losers: Sun Pharma (down 3 percent), M&M (down 1.3 percent), and L&T (down 0.5 percent).

Stocks in news:

Shares of Jet Airways plummeted 10 percent after reports emerged that Hinduja Group and Etihad Airways may no longer proceed with plans to revive the ailing carrier.

Indiabulls Housing Finance (IHFL) shed 8 percent after a legal appeal filed against the company for alleged misappropriation of Rs 98,000 crore of public money.

Shares of Sun Pharma fell 3 percent after brokerage firm Goldman Sachs downgraded the stock to sell and cut the target price from Rs 437 to Rs 355.

Sterlite Technologies surged 10 percent after promoters removed all pledge on company’s shares.

Global update:

European markets were trading higher despite renewed trade tariff threats by US President Donald Trump.

Asian markets ended on a higher note on June 11. Shanghai Composite jumped 2.58 percent at 2,925.72, Nikkei was up 0.33 percent at 21,204.28 and Kospi added 0.59 percent at 2,111.81.