 "Exit poll impact: GIFT Nifty zooms past 23,300; Sensex to open gap-up")
Pre-stock market update Monday, June 03, 2024: Indian equity benchmark indices – the S&P BSE Sensex and the NSE Nifty are expected to open with a huge gap-up in reaction to the Lok Sabha 2024 exit poll data, which predicts a victory for the Narendra Modi-led BJP-government by an overwhelming margin.
“The exit polls results which indicate clear victory for the NDA with around 360 seats completely removes the so called election jitters which have been weighing on markets in May”, said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services in a note.
Largecaps in financials, capital goods, automobiles and telecom are likely to lead the rally. The bulls will be further emboldened by the better-than-expected 8.2 per cent growth in GDP numbers which came after market hours on Friday, the analyst added.
On Monday at 07:00 AM, Gift Nifty futures quoted around 23,336 - indicating a likely gap-up of around 500 points on the NSE Nifty 50 index.
The week ahead, is likely to be action-packed, as post actual election results on Tuesday, the RBI policy decision on June 07, Friday, will be on investors radar.
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Global mood
On Friday, the US market rallied sharply after the PCE price index data came in in-line with expectation, the PCE is Fed’s preferred inflation gauge. The PCE reading showed some mild cooling in inflation, although it still remained well above the Fed’s 2 per cent annual inflation target.
The Dow Jones surged 1.5 per cent, and the S&P 500 rallied 0.8 per cent. Nasdaq, however, ended on a flat note owing to profit-taking in technology shares. The focus has now shifted to nonfarm payrolls data this week.
The US 10-year yield eased a wee bit below the 4.5 per cent mark. Among commodities, Gold futures quoted around $2,350 levels, while Brent Crude Oil steadied around $81 per barrel.
Markets, in the Asia-Pacific region, traded on an upbeat note this morning. Japan’s Nikkei and Malaysia’s Kospi jumped up to 1.5 per cent. Australia’s – All Ordinaries and the ASX 200 indices advanced around 0.9 per cent.
Fund flow action
Foreign institutional investors (FIIs) net bought stocks to the tune of Rs 1,613 crore on Friday, whereas; domestic institutional investors were net buyers of shares worth Rs 2,114 crore.
Moreover, in the derivatives segment, FIIs long-short ratio in index futures remained at 0.16, with short index futures at 85.94 per cent, NSE data shows. On the other hand, retail investors’ index long-short ratio rose to 2.27, with 69.39 per cent index longs.
Trading strategy for Monday, June 03 - Should you be a buyer or seller today? Here’s what market experts recommend
Ashwin Ramani, Derivatives & Technical Analyst, SAMCO Securities
Strong call writing has been observed at the Nifty 23,000 Strike. The put writers (Bulls) mounted a spirited challenge from the call writers (Bears) at the 22,500 Strike. The option activity at the 22,500 Strike will provide cues about Nifty’s Intra-day direction on Monday.
In case of the Bank Nifty, the call writers (Bears) have sizeable positions at the 49,000 Strike and the option activity at this strike will provide cues about Bank Nifty’s Intraday direction.
Osho Krishan, Sr. Analyst - Technical & Derivative Research, Angel One
From a technical point of view, the Nifty index has seen an intense correction after two consecutive weeks of rallying and settled just above the 50 per cent Fibonacci retracement of the recent rally, starting from 21,820 to the lifetime high of 23,110.
For now, 22,450-22,400 is the potent support for the Nifty, while a further drop could disrupt the short-term structure of the technical charts. On the higher end, 22,600-22,650 is the intermediate resistance, followed by the sturdy hurdle of the bearish gap placed around 22,820-22,850 subzones.
Primary Market Update
Kronox Lab Sciences’ Rs 130 crore IPO to open for subscription on Monday. The company is offering 66.99 lakh shares in the price band of Rs 129 - Rs 136. The offer closes on June 05, 2024.