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Market Closing Commentary

Indian benchmark indices witnessed a volatile session on June 5 and closed marginally lower as investors reacted to the RBI Monetary Policy outcome and continued FII selling. The RBI kept the repo rate unchanged at 5.25% and maintained its neutral policy stance, while raising its inflation forecast and lowering GDP growth projections, which kept market sentiment cautious throughout the session. At close, the Nifty 50 declined 49.85 points or 0.21% to settle at 23,366.70, while the Sensex fell 116.67 points or 0.16% to close at 74,243.34.

On the sectoral front, Nifty Media extended its gaining streak and emerged as the top-performing sector, advancing 3.48% on the back of sustained buying interest. Healthcare and Realty stocks also witnessed notable buying activity and ended higher. On the downside, Nifty Metal, IT, and Cement-related stocks remained under pressure and weighed on overall market sentiment. The broader market witnessed mixed trends. The Nifty Midcap index traded with a negative bias amid some profit booking, while the Nifty Smallcap index attracted selective buying interest and ended the session largely flat.

Nifty Outlook

Nifty on the weekly chart has formed a second consecutive bearish candlestick pattern with a lower high and a lower low highlighting extension of the corrective decline. Going ahead in the coming week, index is likely to consolidate in the range of 23,000-23,550. Only a move above Tuesday high 23,556 will open upside towards the resistance area of 23,750-23,800 levels in the coming sessions.

On multiple occasion buying demand during last week has emerged from the key support area of 23,200-23,000 being the confluence of the lower band of the 8th April bullish gap area, lower band of recent consolidation and the 61.8% retracement of the previous pullback (22,182-24,601). A breach below 23,000 levels can open further downside towards 22,600 levels in the coming weeks. Index has resistance at 23,750-23,800 levels being the confluence of the last week high and 50 days EMA and the trendline resistance joining recent highs. Only a move above 23,800 will open further upside towards 24,100 levels in the coming weeks.

Bank Nifty Outlook

The index formed a high wave candlestick pattern with a long lower shadow indicating buying demand at lower levels from the key support area of 52,500-53,000. Bank Nifty in the last three weeks is seen consolidating the broad range of 52,700-55,600. We expect the index to extend the same and only a breakout or breakdown will signal the next directional momentum in the index.

Index has key support placed at 52,500-53,000 being the confluence of the lower band of the 8th April bullish gap area and the 61.8% retracement of the previous pullback (49955-57456). Resistance is placed at 55,200-55,600 levels being the confluence of the 50 days EMA and the upper band of the last three weeks consolidation. On the higher side only a breakout above 55,600 will open further upside towards 56,500 levels in the coming weeks.

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