Nifty reclaims 10,100, but experts say wait for a breakout above 10,176

Positive global cues saw the bulls push the benchmark indices above crucial resistance levels on June 5, with the S&P BSE Sensex reclaiming 34,000 and the Nifty50 going past the crucial 10,100 level.

Globally, stocks hovered close to three-month highs as the euro hit its highest level since March 10, thanks to Europe’s stimulus boost, fuelling hopes for a global rebound, said a Reuters report.

Global investors are pricing in an economic recovery despite data showing the severe damage wrought by coronavirus lockdowns, said the report.

The Sensex ended the day 306 points higher at 34,287 while the Nifty50 rallied 113 points to close at 10,142.

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For the week, the Sensex was up 5.7 percent while the Nifty closed with gains of 5.8 percent.

“Indian indices, led by financials, came back strongly from yesterday’s indecisiveness, amidst positive global cues. The global positive sentiment was driven by additional stimulus measures from ECB,” Vinod Nair- Head of Research- Geojit Financial Services told .

“Investors are banking on a global economic recovery, fuelled by central bank policy measures to support the respective economies. Investors need to be a bit cautious since valuations are running high and the expected recovery is not yet visible in the numbers.”

Sectorally, the action was seen in the public sector, metals, telecom, and the Bankex, while profit-taking was visible in IT, and FMCG stocks.

The broader markets outperformed the benchmarks. The S&P BSE Midcap index rose 1.79 percent, followed by the S&P BSE Smallcap index which was up 2.5 percent.

Top Nifty gainers included SBI, Bharti Infratel and Tata Motors, which were up 7-12 percent.

Top Nifty losers included Bajaj Auto, Cipla, HUL, and TCS that were up over a  percent each.

Stocks and sectors

Sectorally, the S&P BSE BSE Public Sector index was up 4.1 percent followed by the S&P BSE Metal index, which was up 3.8 percent and the S&P BSE Finance index gained 2.7 percent.

Profit-taking was visible in the S&P BSE IT index which was down 0.75 percent and the S&P BSE FMCG index fell 0.32 percent.

A volume spike of more than 100 percent was seen in stocks like SBI, PFC, NIIT Tech, Siemens, UBL and Torrent Power.

Long buildup was seen in stocks like Ashok Leyland, UBL, Torrent Power, PVR, Cummins India and SBI

Rajesh Exports, KP Energy and Responsive Industries were among more than 100 stocks that dropped to a 52-week low on the BSE.

More than 60 stocks hit a 52-week high. These included RIL, Lupin, Cipla, Sun Pharma, Biocon, Torrent Power and Marksans Pharma.

Stocks in news

Bharti Infratel | CMP: Rs 237.15 | The stock price jumped over 8 percent after the firm said its board will meet on June 11 to take a final call on its big-ticket merger with Vodafone Idea-owned Indus Towers.

Larsen & Toubro | CMP: Rs 957.55 | The share was up almost 3 percent after L&T Construction bagged an order from the irrigation and command area development department of the Telangana government.

PI Industries | CMP: Rs 1,633 | The stock rose over 5 percent despite the company reporting a 12 percent fall in its consolidated net profit at Rs 110.7 crore for the fourth quarter of the financial year 2019-20 on higher expenses.

Saregama |CMP: Rs 441.70 | The share price jumped 10 percent after the company’s consolidated net profit went down 7.1 percent at Rs 15.8 crore against Rs 17 crore YoY.

Tata Motors | CMP: Rs 111.95 | The stock price zoomed over 13 percent ahead of the group’s board meeting later on June 5. It was the top auto gainer, with volumes increasing by 101 percent.

Technical View

The Nifty formed a small bullish candle on the daily charts but 10,176 remains a crucial hurdle.

Initiate fresh longs on a close above 10,176 while a close below 9,944 can lead to a breakdown.

Traders should wait for a breakout in either direction before initiating trading bets, say experts.

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