Daily Markets Wrap - June 7, 2022 - HDFC Securities

Mr. Deepak Jasani, Head of Retail Research, HDFC Securities

Nifty fell in line with most global markets for the third day in a row on June 07. Nifty opened gap down and fell in the morning to make an intra day bottom at 1125 Hrs. It later tried to bounce up and later went sideways. At close, Nifty was down 0.92% or 153.2 points at 16416.4.

Volumes on the NSE continued to be below recent averages. Among sectors Oil & Gas, Power and Auto indices rose the most while Realty, IT, Capital Goods and Consumer Durables fell the most. The Smallcap and midcap indices fell less than the Nifty but the advance decline ratio was sharply negative.

Asian stock markets were mixed Tuesday following a bond sell-off in US amid anxiety about higher interest rates.European stocks slipped into negative territory on Tuesday amid nervousness over inflation, with the next reading of U.S. inflation due at the end of the week.A surprise 50-basis-point rate increase in Australia (highest in 22 years) raised concern over policy tightening ahead of U.S. inflation data and a European Central Bank meeting this week.

Nifty filled the upgap made on May 30, thus nullifying the bullishness arising therefrom. However, it closed above the gap level. This was the second day in a row when we saw a recovery in Nifty from intraday lows, suggesting bottomfishing even as the selling pressure at lower levels reduces. 16352-16522 could be the band for the Nifty in the near term.

We expect 40bps rate hike in the upcoming policy meet on June 08 and expect the RBI raising policy rates to reach 5.15% by Aug/Oct. The recent measures by the government will aid in keeping the rate hike relatively shallow, though determination of terminal rate will be much more data dependent given the flux in global conditions.

Source : Equity Bulls

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