A morning walk down Dalal Street | Market may see further selling pressure

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A black Monday on D-Street as both Sensex and Nifty breached their crucial support levels on the downside.

The S&P BSE Sensex gave up 39000 while the Nifty50 broke below 11800 levels

Weak global cues, trade war fears, high valuations, rise in crude oil prices, delay in monsoon, and reduction in the flows from foreign investors were some of the factors that weighed on sentiment.

The final tally on D-Street – the S&P BSE Sensex fell by 491 points to 38,960 while the Nifty closed 151 points down at 11,672.

Sectorally, the S&P BSE Metal index plunged over 3 percent, followed by the S&P BSE Oil & Gas index that was down 2.3 percent, the S&P BSE Telecom index, which was down 2.1 percent, and the Bankex that dipped 1.2 percent.

In the broader market space, the S&P BSE Midcap index was down 1.29 percent and the S&P BSE Smallcap index plunged 1.35 percent.

In the beginning of the month, RBI MPC lowers GDP growth projection to 7 percent from earlier 7.2 percent for FY20. Fitch June 17 lowered India’s growth forecast to 6.6 percent for the current fiscal from 6.8 percent projected earlier, as manufacturing and agriculture sectors showed signs of slowing down over the past year.

The Indian rupee June 17 fell by another 11 paise to close at 69.91 to the the US currency, its third straight-session loss, in line with intense sell-offs in domestic equities amid concerns over Indo-US trade tariff disagreements.

On the institutional front, FPIs were net sellers in Indian markets for Rs 331 crore while the DIIs were net buyers to the tune of Rs 1257 crore, provisional data showed.

Big News:

After hitting a record high of 12103 on June 3, market momentum drifted south

The Nifty50 started falling from 3rd June broke below crucial support levels of 11900, 11800, 11700 levels

Investor wealth eroded by over Rs 2 lakh crore on June 13 after the BSE benchmark index tanked over 491 points following weak sentiments in the broader market.

Led by the selling in equity market, the market capitalisation of BSE-listed companies dropped by Rs 2,00,258.81 crore to Rs 1,50,09,329.19 crore.

At the BSE, 1,879 companies declined, while 685 advanced and 131 remained unchanged. In the broader market, the BSE mid-cap and small-cap indices also dropped up to 1.35 percent.

Technical View:

Nifty forms a Bearish Belt Hold pattern for the second day in a row

In terms of technicals, Nifty formed a bearish belt hold pattern on daily charts for the second consecutive day in a row. The index also slipped below its crucial 50-day moving average placed at 11,681 for the first time since May 8, 2019.

The market could see further selling pressure but if it holds its bullish gap zone of 11,591-11,426 created in May then there could be consolidation followed by an upward journey, experts said.

Three levels: 11657, 11844, 12040

Max Call OI: 12000, 12500

Max Put OI: 11500, 11700

Stocks in news:

Engineering major L&T’s open offer to buy 31 percent of Mindtree shares at Rs 980 per share opened on June 17, 2019.

Lenders of Jet Airways, led by State Bank of India (SBI), have decided to seek resolution for the grounded airline under the Insolvency and Bankruptcy Code (IBC) after a failed stake sale attempt and months of deliberations to find new investors.

Technical Recommendations:

We spoke to Religare Broking and here’s what they have to recommend:

Power Grid Corporation of India: Buy| Target: Rs 203| Stop-Loss: Rs 188| Upside 5.2 %

Ashok Leyland: Sell June Futures| Target: Rs 78| Stop-Loss: Rs 89 |Downside 8.2%

Canara Bank: Sell June Futures| Target: Rs 245| Stop-Loss: Rs 268| Downside 5.8%

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