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Market Closing Commentary

Indian benchmark indices opened on a positive note on 17 June and extended gains during the early part of the session. However, some profit booking emerged after the indices touched intraday highs, leading to a phase of consolidation. Despite the subdued intraday movement, the market managed to close in positive territory, supported by Brent crude oil prices slipping below $80 per barrel and the absence of any major escalation in geopolitical tensions. Market participants also remained cautious ahead of the outcome of the U.S. Federal Reserve's two-day FOMC meeting, with investors closely tracking the upcoming interest rate decision and policy commentary.

At close, the Nifty 50 gained 96.55 points or 0.40% at 23085 to settle higher, while the Sensex advanced 347 points or 0.45% to close at 77,155. On the sectoral front, Nifty Consumer Durables emerged as the top-performing sector, followed by PSU Banks and Cement stocks, which witnessed strong buying interest throughout the session. On the other hand, Nifty Auto and Realty indices underperformed and ended the day in negative territory amid selective profit booking. The broader market also remained firm, reflecting healthy participation beyond the benchmark indices. The Nifty Midcap 100 index gained 0.52% to close at 62,123, while the Nifty Smallcap 100 index outperformed, rising 0.79% to settle at 18,623.

Nifty Outlook

Index formed a bullish candlestick pattern with a higher high and a higher low as it extended up move for the fourth session in a row. Nifty in the process closed firmly above the 24,000 levels. Nifty on Wednesday session tested the upper band of the last two months falling channel which also coincides with the previous swing high of 26th May placed around the 24,100 levels. 

Going ahead, a follow through move and a close above 24,100 will infuse further momentum and open upside towards 24,600 levels in the coming weeks. However, failure to close above 24,100 will lead to some consolidation in the range of 23,600-24,100 in the coming sessions.

We believe the overall structure is positive, and any dips should be used to accumulate quality stocks in a staggered manner. We expect the index to eventually breakout above the 24,100 levels and gradually head towards 24,600 levels. Immediate support in Nifty is placed at 23,900-23,800 levels, while key short-term support is revised higher towards 23,500-23,600 levels.

Bank Nifty Outlook

Index formed a bullish candlestick pattern which continues to consolidate within Monday’s price range signaling consolidation with stock specific action. PSU banking stocks outperformed on Wednesday session as the Nifty PSU bank Index closed the session higher by more than 1.5%. Bank Nifty after a strong rally of 4800 points in the just 10 sessions is witnessing consolidation on expected lines in the last 3 sessions amid stock specific action.

Key observation in the daily chart is that the 20 days EMA has generated a bullish crossover above its 50 days EMA thus supports the positive bias in the index. We expect the index to head towards 58,300 and 59,000 levels in the coming weeks being the measuring implication of the recent four-week range breakout (52,700-55,500). Index sustaining above 55,500-56,000, will keep the short-term bias positive and any dips should be viewed as buying opportunities. Only a decisive breach below the 55,500-support level would negate the positive outlook.

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