Lockdown extension, weak global cues weigh on D-St; Sensex below 35,000

Tracking weak global cues and accelerating COVID-19 infections, D-Street witnessed a kneejerk reaction on June 29.  Value buying was seen in the last hour of the trade, which took Sensex below 35,000 while the Nifty50 managed to hold on to 10,300.

The downside from current levels looks limited but for the bulls to take control, a close above 10,337 on the Nifty50 is required.

Let’s look at the final tally on D-Street: the S&P BSE Sensex fell 209 points to 34,961 while the Nifty50 slipped 70 points to close at 10,312.

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“The benchmark indices ended on a negative note on the back of mixed global cues as surging virus cases around the world and especially in the US, threatened to derail the economic recovery hopes,” Vinod Nair, Head of Research at Geojit Financial Services, said.

“With states in India set to extend lockdown or reconsidering bringing back lockdown measures, markets seem to be weighing the bad news. As before, the uptrend remains intact but the upside may be capped.”

Sectorally, the action was seen in the telecom and the FMCG space while profit-taking was seen in realty, metals, capital goods and power stocks.

On the broader markets front, the S&P BSE Midcap index was down 1.39 percent followed by the S&P BSE Smallcap index that fell 1.23 percent.

Top Nifty gainers included HUL, Cipla, Britannia Industries, and HDFC Bank.

Top Nifty losers included Hindalco, Tech Mahindra, Axis Bank, and Coal India.

Stocks & Sectors

Sectorally, the S&P BSE Telecom index rose 1.3 percent followed by the S&P BSE FMCG index, which was up 0.84 percent.

Selling pressure was seen in the S&P BSE Realty index that fell 2.9 percent, followed by the S&P BSE Metal index that was down 2.5 percent, and the S&P BSE Capital Good Index closed with losses of 2.3 percent.

A volume spike of more than 100% was seen in stocks like Dabur India, Piramal Enterprises, Britannia Industries and Bharat Forge.

Long buildup was seen in stocks like JustDial, Glenmark, and Idea.

Short buildup was seen in stocks like Ashok Leyland, Bharat Forge, and UBL.

More than 100 stocks hit a 52-week high on the BSE. These include AstraZeneca, Ruchi Soya, Tata Communications, Omaxe, EID Parry and Best Agrolife.

Stocks in news

Andhra Pape stock surged 20 percent after Radhakishan Damani-owned Bright Star Investments acquired a stake in the company.

Piramal Enterprise’s stock price gained over 2 percent after US-based global investment firm Carlyle Group Inc said it will buy a 20 percent stake in Piramal Pharma for around $ 490 million.

Bharat Forge share price tumbled 10 percent after the company reported a loss in Q4 FY20 against a profit in the year-ago period.

Welspun India share price jumped 5 percent after the company reported a consolidated profit at Rs 85.6 crore in the quarter ended March 2020 against a loss of Rs 79.3 crore in the year-ago period.

MRF stock price shed 2 percent after the company declared its March quarter numbers.

Ashok Leyland stock was down over 7 percent after global research firm CLSA maintained its underperform rating on the stock but raised the target price to Rs 53 from Rs 47 per share.

Emami shares were down over 7 percent after the company reported weak results for the March quarter.

Metal stocks came under pressure after A Wall Street Journal report said the phase 1 US-China trade deal could be at risk.

Top Nifty gainers included HUL, Cipla, Britannia Industries, and HDFC Bank.

The top losers included Coal India, NALCO, SAIL, Hindalco and NMDC, which shed 3-5 percent each.

Technical View

The Nifty formed a Doji candle on the charts and It closed below 5-day EMA.

The near-term outlook continues to remain directionless.

A breakout on either side of its larger trading range present between 10,553 – 10,194 levels. Downside still looks limited unless it breaks below 10,194-10,000, experts said.

On the upsides, if the Nifty trades above 10,337 levels for at least 30 minutes, then the strength shall get extended to 10409 levels.

“Traders are advised to avoid short side bets as the downside seems to be limited, whereas intraday traders can consider going long above 10,337 for a modest target of 10409 with a stop below intraday low,” Mazhar Mohammad of Chartviewindia.in said.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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