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Pre-stock market update for Thursday, June 13, 2024: The Sensex and the Nifty are likely to open with a significant gap-up this morning backed by positive cues from overseas peers. The benchmark indices may attempt to scale new record highs amid the renewed optimism on economic growth.
On Wednesday, the Sensex topped the 77,000-mark for the second time in history, but fell short of its record high of 77,079. The BSE benchmark eventually ended 0.2 per cent higher at 76,607.
Meanwhile, the NSE Nifty hit a new high of 23,442, but settled at 23,323 – up 0.3 per cent.
At 07:00 AM, Gift Nifty futures quoted around 23,460 levels and hinted at a likely gap-up of over 50 points on the Nifty 50 index.
Key triggers for the day
Last night, the US Federal Reserve maintained its key interest rate at 5.25 per cent - 5.50 per cent for the seventh straight meeting. While announcing its decision, the rate-setting panel indicated that only one rate cut is anticipated in the year 2024 as against 3 projected earlier.
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Further, CPI-based inflation eased marginally to 3.3 per cent in May. The focus tonight will be on Producer Price Index-based inflation.
Meanwhile, market will also be reacting to domestic economic data released post market hours on Wednesday.
Consumer Price Index (CPI)-based headline retail inflation eased to a 12-month low of 4.75 per cent in May on the back of a softening core and fuel inflation. Separately, the Index of Industrial Production (IIP) also moderated to 5 per cent in April from an upwardly revised figure of 5.4 per cent in the preceding month.
That apart, the Nifty may swing to weekly options related expiry pressure on Thursday.
Global mood
Overnight, the S&P 500 and NASDAQ ended at record highs for the third straight trading session led by a rally in technology shares. Dow Jones, however, slipped 0.1 per cent.
The US 10-year yield dropped to 4.318 per cent. Among commodities, Gold futures continued to quote around $2,330 levels, while Brent Crude Oil futures hovered around $82 per barrel.
Markets, in the Asia-Pacific region, traded with a positive bias this morning. The Australian equity benchmarks – the S&P ASX 200 and All Ordinaries gained 0.7 per cent and 0.2 per cent, respectively. Japan’s Nikkei advanced 0.3 per cent, while Kospi soared 1.6 per cent.
Fund flow action
Foreign institutional investors (FIIs) were net buyers of stocks worth Rs 427 crore on Wednesday; whereas, domestic institutional investors (DIIs) net bought shares to the tune of Rs 234 crore.
In the derivatives segment, FIIs index long-short ratio rose to the highest level since May 30 to 0.71. The FIIs net index shorts now stand at 58.58 per cent as against 87.13 per cent on May 30.
Trading strategy for Thursday, June 13 - Should you be a buyer or seller today? Here’s what market experts recommend:
Ashwin Ramani, Derivatives & Technical Analyst, SAMCO Securities
The Nifty has been unable to decisively close above the 23,400 level since last three days. Strong call writing was observed at the 23,400 Strike in Nifty. Significant call writing was also observed at the 23,500 Strike in the Index. The option activity at the 23,400 Strike will provide cues about Nifty’s intraday direction ahead of the weekly expiry today.
The Bank Nifty has been unable to break past the 50,200 level decisively since the last three trading sessions. Strong call writing was observed at the 50,000 Strike in Bank Nifty. The call writers (Bears) have sizeable positions at the 50,000 Strike and the option activity at this strike will provide cues about Bank Nifty’s upcoming direction.
Om Mehra, Technical Analyst, SAMCO Securities
The Nifty has formed a doji candle once again on the daily timeframe, with the daily RSI remaining neutral at 59. The immediate support for Nifty is at 23,200, and if this level is breached, the index could slip toward the 23.6 per cent Fibonacci retracement level at 22,900.
The Bank Nifty has formed doji candles on the daily timeframe. The trend would become clearer if it moves above 50,300 or below 48,900. If these levels are not breached, the index might consolidate within this range for the next session.
Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates
Technically, since the past three trading sessions, the Nifty is still consolidating in the 23,000–23,500 range, finding it tough to surpass the 23,500 mark. Thus, as long as the index remains below 23,500, profit booking is possible.
Overall, we expect the Nifty to consolidate in the 23,000–23,500 range in the short term. If the index remains above 23,500, the rally may extend to 23,700-23,800 levels. On the downside, immediate support for the Nifty is placed near 23,000, followed by 22,680, where the 34-Day Exponential Moving Average (DEMA) support is placed.
The Bank Nifty formed a Tri-Star doji candlestick pattern. According to this pattern, if the index sustains below 49,530, profit booking may be feasible. On the downside, immediate support for the index is placed near 49,000 levels, where 21-DEMA is placed.
Rupak De, Senior Technical Analyst, LKP Securities
The short-term trend remains positive as long as the Nifty stays above 23,300. In the near term, the index might continue consolidating within the 23,300-23,500 range. A decisive breakout above 23,500 could trigger a rally towards 23,800.
Stocks to watch
Insurance: Shares of life insurance companies are likely to be in focus after Insurance Regulatory and Development Authority of India (Irdai) mandated insurers to provide loans on policies across all life insurance savings products, excluding unit linked schemes.
The withdrawal, which will be permitted only three times during the tenure, should not exceed 25 per cent of the total premiums paid as on the date of the partial withdrawal, it said. READ MORE
Banks, NBFCs: Moody’s predict that the pace of credit growth of commercial banks is expected to moderate in FY25 to 12-14 per cent due to challenges in raising resources and regulatory concerns on unsecured credit. READ MORE
