Nifty to gain or sink below 18700? See SGX Nifty, FII data, US shares, more things to know before market opens The SGX Nifty recorded a gain of 0.17% during Friday’s early trading session, with a value of 18,753, indicating a mildly positive opening for the domestic indices NSE Nifty 50 and BSE Sensex. The equity indices snapped a four-day winning streak to settle in the red, with Nifty sliding 0.49% to 18,753 while Sensex was down almost 300 points to 62,848. “Indian equities witnessed profit booking on the day of the RBI policy meeting outcome, which was on expected lines. Nifty opened higher and remained strong for the first hour of trade. However, post the RBI policy outcome; markets saw some profit booking in the interest rate-sensitive sectors, which dragged the indices down,” said Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services. Shares in the Asia-Pacific region were trading in the green, following the positive cues from Wall Street. China’s Shanghai Composite gained 0.06% in trade, while Japan’s Nikkei 225 was soaring 1.69%. Hong Kong’s Hang Seng index added 0.11% while South Korea’s Kospi advanced by 0.83%. The Taiwan Weighted index surged 0.77%. Oil prices fell in early Asia trade on Friday as demand concerns outweighed the prospect of tighter supply from global producers while investors remained skeptical that the United States and Iran could strike a nuclear deal. Foreign institutional investors (FII) net purchased shares worth net Rs 212.40 crore, while domestic institutional investors (DII) net sold shares worth net Rs 405.01 crore on June 8, according to the provisional data available on the NSE. The National Stock Exchange has Manappuram Finance and Indiabulls Housing Finance securities on its F&O ban list for 9 June. According to the NSE, stocks are prohibited in the F&O sector when they have exceeded 95% of the market-wide position limit (MWPL). During the F&O ban period, no new positions are permitted for F&O contracts in that stock. “Following the RBI policy, the Bank Nifty index experienced persistent selling pressure around the 44,500 level. In terms of support levels, the index has a support level positioned at 43,700. A breach below this support level might indicate a further downside potential and could attract additional selling interest from traders and investors. The index is stuck in a range and a break on either side will have directional movement,” said Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities. “As long as the NSE Nifty 50 is trading below 18,725, the technical correction is likely to continue. Below which, the market could slip till 18,600-18,550. Contra traders can take a long bet near 18550 with a strict stop loss at 18,520,” said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.
However, he believes that the impact on the Indian market is going to be temporary since there could be some short-term impact on flows into Indian equity markets. But since the Indian economy is on a strong wicket and will continue to remain resilient.
“Improved fiscal situation, controlled current deficit, stable interest scenario combined with good corporate earnings should lead to limited impact on the Indian bond market and equity market too,” he added.
The midcap and smallcap indices took a bigger knock with the BSE MidCap fell 2.51%, while BSE SmallCap index dived 4.18%. According to Amnish Aggarwal, head, research, Prabhudas Lilladher, the valuations were already high and some correction was expected. “If the situation sustains as it is then further correction can’t be ruled out,” Aggarwal said.
Telecommunication and industrials indices were the top laggards with BSE Telecommunication declining 3.82%, followed by BSE Industrials falling 3.26%. JSW Steel (-2.99%), Tata Steel (-2.52%) and Tata Consultancy Services (-2.44%) were the top losers of Sensex.
Surprisingly, both foreign portfolio investors and domestic institutional investors were net buyers today. While, FPIs net bought shares worth Rs 252.25 crore, DIIs have purchased shares worth Rs 1,111.84 crore, as per provisional data from exchanges.
Calling this a “normal phenomena” Pankaj Pandey, head, research, ICICI Direct said, “I will not really give too much weight to a single day buying figure. Amid concerns of elevated interest rate and geopolitical tensions, in a typical market cycle, 8-10% correction is possible at any point in time.”
The brunt of geopolitical conflict, elevated interest rates and rising crude oil prices was also felt by other Asian- Pacific markets. Jakarta Composite Index lost 1.57% followed by Shanghai Composite Index and PSEi, which fell 1.47% and 0.89%, respectively. Nikkei and KOSPI declined 0.83% and 0.76%.