Profit booking in last hour, Nifty holds 10,000 levels; banks shine

Profit booking hit D-Street in the last hour of the trade on June 3 as the S&P BSE Sensex fell nearly 400 points from the high of 34,488 while the Nifty50 witnessed selling pressure near 10,200 levels.

The benchmark indices though managed to close in the green again, with the S&P BSE Sensex ending 284 points higher at 34,109 while the Nifty50 was up 82 points at 10,061.

“Indian equity markets continued to rise for the sixth straight session on June 3 – the longest winning streak in around seven months,” Deepak Jasani, Head Retail Research, HDFC Securities, said.

“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.

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Sectorally, action was visible in realty, banks, finance, oil & gas, and capital goods stocks. Profit-taking was seen in telecom, power, IT, and metal space.

The NiftyBank rose 2 percent to 20,940 led by gains in Bandhan Bank, PNB, Kotak Bank, RBL Bank, and SBI among others.

On the broader market front, the S&P BSE Midcap index was up 0.3 percent while the S&P BSE Smallcap index rose over 1 percent.

Top Nifty gainers included Nestle India, Kotal Bank, Bajaj Finance and M&M.

Top Nifty losers included UPL, ZEE Entertainment, Bharti Infratel, Wipro, and NTPC.

Experts say volatility is likely to continue as the Nifty trades near crucial resistance levels but there are plenty of stock-specific opportunities.

“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, i.e. June 4,” Ajit Mishra, VP – Research, Religare Broking Ltd, told Moneycontrol.

“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,” he said.

Stocks & Sectors

Sectorally, the action was seen in the S&P BSE Realty index that was up 3.07 percent followed by the S&P BSE Bankex that rose 2.07 percent and the S&P BSE Finance index closed with gains of 1.86 percent.

Profit-taking was visible in the S&P BSE Telecom space that fell 0.9 percent, followed by the S&P BSE Power index which was down 0.8 percent, and the S&P BSE IT index fell 0.4 percent.

A volume spike of more than 100 percent was seen in stocks like Canara Bank, PNB, Adani Enterprises, Adani Power, BEL and Britannia Industries.

Long Buildup was seen in stocks like Godrej Properties, InterGlobe Aviation, RBL Bank, HDFC Life and Bajaj Finance.

Short Buildup was seen in stocks like Tata Power, Torrent Pharma, UBL and Adani Power.

Dixon Tech, Britannia Industries, Aarti Drugs, Escorts and Aurobindo Pharma were among more than 50 BSE stocks to hit a 52-week high.

Stocks in news

Banks, financial stocks rally | Banks and financial stocks gained the most as the economy gradually comes out of the coronavirus lockdown. Among the banks, Kotak Mahindra Bank, Bandhan Bank, SBI, PNB, and ICICI Bank gained 2-3 percent.

Britannia Industries | The stock closed almost 2 percent 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.

Saregama India | The share price was locked in a 20 percent upper circuit after the music company announced a partnership with Facebook.

Steel Strips Wheels | The share price rose nearly 6 percent after the company bagged an export order.

InterGlobe Aviation | The stock price of the IndiGo owner jumped 7 percent despite the company reporting a loss in the March quarter. Morgan Stanley says the valuation in the context of earnings potential is attractive.

Tata Motors | The stock was up 2 percent after the company said it resumed operations at all manufacturing plants in the country.

Technical View

The Nifty50 closed in the green for the sixth day in a row.

Mild profit-taking at the top is a concern but as long as the Nifty holds 9,979-9,950, the upside should continue.

If we uptrend resumes, the index can come closer to 10,300, say experts.

If the Nifty trades below 9,995 then traders should create short positions with a stop above 10,050 on the closing basis and look for targets close to 9700 levels, says Mazhar Mohammad of Chartviewindia.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.

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