 "Lok Sabha elections 2024: Will Sensex vault another 2,000 points today?")
Pre-stock market update Tuesday, June 04, 2024: After a roaring rally to the exit poll outcome, equity benchmark indices brace for the actual Lok Sabha election results today, as counting of votes start at 8:00 AM.
The S&P BSE Sensex surged 3.4 per cent or 2,507 points to 76,469, and the NSE Nifty 50 index zoomed 3.3 per cent or 733 points to 23,264. The Bank Nifty surged 4.1 per cent or 1,996 points to 50,980 on Monday.
The sustenance of the broad rally is anticipated to continue in-line with the magnitude of the actual tally, as inflows pours in which were sitting on the sidelines in the last three months, said Vinod Nair, Head of Research, Geojit Financial Services in a note.
In the coming weeks, strong economic data like GDP growth of 8.2 per cent in FY24, 100-day measures list and final budget will be the key points that the market will observe, Vinod Nair added.
On Tuesday at 07:00 AM, Gift Nifty futures quoted around 23,556 - indicating a likely gap-up of around 100-odd points on the NSE Nifty 50 index.
How much will the benchmark indices gain today? Will the Sensex and the Nifty hit the upper limit on Tuesday? As all eyes to remain glued to election results; here’s what technical analysts predict for the benchmark indices.
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Trading strategy for Tuesday, June 04, 2024:
Ruchit Jain, Lead Research, 5Paisa.com
Yesterday, the Nifty ended well above the previous hurdle of 23,100-23,000 which hints at a continuation of the uptrend.
The previous hurdles will be seen as the immediate support now, while on the higher side retracements of previous moves hints at possible targets around 23,700 followed by 24,000-2,4200. Hence, traders are advised to continue trade in the direction of the primary trend with a positive bias.
Ashwin Ramani, Derivatives & Technical Analyst, SAMCO Securities
All Strikes from 22,500 until 23,000 saw call writers (Bears) exiting and additional put writing. The Nifty broke its upper channel on the daily chart and closed above the key 23,100 level. The channel which acted as a resistance earlier is likely to act as a support now. If the BJP led NDA government bags 400 seats, a sharp rise further can’t be ruled out.
All Strikes from 49,500 until 50,000 on the Bank Nifty saw call writers (Bears) exiting and put writing. The call writers (Bears) have sizable positions at the 51,000 Strike and the option activity at this strike will provide cues about Bank Nifty’s intraday direction today.
Om Mehra, Technical Analyst, SAMCO Securities
The Nifty currently holds above its short-term moving averages, suggesting a positive sentiment is prevailing in the market. The immediate support level for the Nifty is at 23,062.30, while the immediate resistance remains at 23,500.
Bank Nifty formed a bullish hammer pattern on the daily chart, indicating potential bullish momentum. To continue this upward trend, it's crucial for Bank Nifty to sustain above the support level of 49,800 and the immediate resistance is expected at 52,000 followed by 52,500 levels.
Neeraj Sharma, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates
Technically, the Nifty has formed a hanging man candlestick pattern on top, which requires further confirmation. The index has crossed the barrier of previous high of 23,110 and has managed to stay above it, indicating strength; however, Tuesday comes a major event, the outcome of the general election, which may cause market volatility.
Thus, in the immediate term, 23,500-23,800 will serve as resistance points. On the downside, the recent breakout peak of 23,110 will act as first key support for the index, followed by 21 DEMA (Days Exponential Moving Average) 22,620.
The Bank Nifty produced a hanging man candlestick pattern on top, which awaits further confirmation. The index has broken over the 49,975 barrier and continues climbing to new highs. As long as the Bank nifty remains above its breakthrough level, the bull runs might extend to 52,000-52,700.
Osho Krishan, Sr. Analyst - Technical & Derivative Research, Angel One
The Nifty 23,100-23,000 level is expected to function as a crucial intermediate support area. Additionally, on the higher end, it's worth noting that 23,500 is positioned in close proximity to the bullish territory on D-Street, which suggests a favorable market outlook.
Rupak De, Senior Technical Analyst, LKP Securities
The sentiment remains highly dependent on the election results on Tuesday. If the election results align with the exit poll or fall below the exit poll numbers, it might attract mild to heavy selling pressure in the overall market, including the Nifty space.
However, if the results are better than expected- meaning if the NDA secures significantly more seats than the average exit poll numbers- then the Nifty might embrace another round of buoyant movement.
Fund flow action
After having net sold stocks to the tune of Rs 42,200 crore in the month of May, foreign institutional investors (FIIs) net bought shares worth Rs 6,851 crore on Monday, in the first trading session of June. Domestic institutional investors too were net buyers of shares worth Rs 1,914 crore.
That apart, in the derivatives segment, too FIIs covered part of their short positions. The FIIs long-short ratio in index futures rose to 0.39 as against 0.16 a day earlier. As of June 01, FIIs held 71.74 per cent short positions in index futures, NSE data shows.
Global mood
Overnight, the US market ended on a mixed note as weaker-than-expected manufacturing numbers sparked debate over likely Fed rate cut bets.
The Nasdaq jumped 0.6 per cent, and the S&P 500 added 0.1 per cent, while Dow Jones slipped 0.3 per cent.
The US 10-year yield eased to 4.4 per cent. Among commodities, Gold futures rose to $2,370 levels, while Brent Crude Oil plunged to $78 per barrel.
Equity markets, in the Asia-Pacific region, traded on a subdued note this morning. Japan’s Nikkei and Malaysia’s Kospi declined 0.6 per cent each. Australia’s – All Ordinaries and the ASX 200 were flat.