Stock Market Fell After 4 Days Of Gains With Sensex Ending At 83,606 And Nifty At 25,517

Indian benchmark indices, the Sensex and Nifty 50, ended lower on Monday, breaking their four-day winning streak. The drop came as investors sold shares to book profits, especially after recent strong gains. Even though the global market environment was mostly positive, Indian markets were dragged down by losses in financial stocks like banks and auto companies.

The Sensex and Nifty ended the day with losses of nearly 0.5%. The BSE Sensex dropped 452.44 points (0.54%) to close at 83,606.46, while the Nifty fell 120.75 points (0.47%) to settle at 25,517.05.

Top Gainers and Losers:

Despite the weak market, some stocks managed to gain. Trent rose over 3% after a positive report from a brokerage firm. Bharat Electronics (BEL), SBI and Indusind Bank also closed higher.

On the flip side, Tata Consumer Products fell over 2.3%, followed by Kotak Mahindra Bank and Axis Bank, which dropped more than 2%. Hero MotoCorp also declined nearly 2% after the government released a draft on ABS regulations, putting pressure on auto stocks.

Public sector banks outperformed, with the Nifty PSU Bank index climbing 2.66%-its fifth consecutive session of gains. consumer durables also ended in green. While auto, FMCG, realty, and metal sectors ended in the red.

While large-cap indices fell, mid- and small-cap stocks stayed strong. The BSE Midcap rose 0.67% and Smallcap gained 0.81%, adding ₹1 lakh crore to overall market value.

What Moved the markets?

The decline was mainly due to profit booking in heavyweight stocks such as Reliance, ICICI Bank, HDFC Bank, Axis Bank, and Kotak Mahindra Bank. Despite today's fall, both benchmark indices still ended the month with over 3% gains.

"The global market sentiment is moving in favour of equities on account of easing risk in the Middle East and the US trade deal hopes. However, the main domestic indices witnessed profit booking after the recent rally.
Investors are now turning their attention to quarterly earnings and will refocus the markets on fundamentals for valuation support. Mid and small-caps outperformed in expectation of better earnings driven by consumption and margin expansion," said Vinod Nair, Head of Research, Geojit Investments.

"The Nifty witnessed some profit-taking as the index closed 152 points off the day's high. Additionally, it has formed a bearish engulfing pattern on the daily timeframe, indicating fatigue in the ongoing market rally," Rupak De, senior technical analyst, LKP Securities.

Key Stock Highlights:

• Raymond saw a sharp 14% jump ahead of the listing of its real estate division, pushing the stock to a 9-month high.
• Deepak Fertilisers rose 7%, while Waaree Energies ended the day 6.6% higher.
• Karnataka Bank also saw a nearly 6% rise after the board approved the resignation of its MD and CEO.
• Sigachi Industries was among the worst performers, falling over 11% after reports of a fire at its Telangana unit.
• JB Chemicals lost nearly 7%, and Home First Finance fell 6.5%. Jyoti CNC Automation, SBI Cards, JK Cement, and Axis Bank also ended the day with notable losses.

Technical Outlook:

"From a technical perspective, despite today's fall, Nifty's short-term trend remains positive as it is still positioned above its nearest moving average support of the 5-day EMA. However, Nifty has formed a bearish engulfing candlestick pattern on the daily chart, which signals potential weakness.

The bearish implication of this pattern only gets validated if the Nifty closes below the candle's low, placed at 25,473. Any move and close above 25,740 would negate this gap resistance and could potentially extend the Nifty's upward rally towards the 26,000 marks," noted Nandish Shah, Senior Derivative & Technical Research Analyst, HDFC Securities.

"A sustained move above the 25,750 mark could rekindle bullish momentum and potentially drive the index towards the psychological level of 26,000. Conversely, pullbacks toward the 25,300-25,400 support zone are likely to be orderly and could set the stage for the next leg higher.

The overall chart structure remains robust, supporting a 'buy-on-dips' strategy as long as the key support levels stay intact, said Dhupesh Dhameja, Derivatives Research Analyst, SAMCO Securities.

Rupee VS Dollar:

The rupee closed 37 paise or 0.43% stronger against the US dollar at 85.81 on Monday, June 30. It had closed at 85.49 on Friday.

"The Indian Rupee broke its two-day upward journey, depreciating by 28 paise against the US Dollar to close at 85.75. This weakening of the rupee is primarily attributed to potential Foreign Institutional Investor (FII) outflows, as domestic markets lost ground due to profit-booking after the indices had recently hit eight-month highs," said Nandish Shah of HDFC Securities.

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