Dear
Trader…
Sensex ended the day at 73,885.60, lower by 617.30 while the
50-stock Nifty settled at 22,660, down by 203 points. Thursday’s session marks
the fifth consecutive day of declines for the benchmark indices.
The market capitalisation of all BSE listed companies fell by
4.49 lakh crore to 410,71,639.09.
Here are the top 5 reasons which led to the downfall: –
1)
F&O Expiry – Thursday is also the F&O
monthly Nifty expiry and the traders could be squaring off their positions.
2)
Election Jitters – With just one phase of
polling to go on Saturday, June 1, the nervousness was palpable on the Street
with analysts decoding the worst and best case scenarios for the market. The
election results will be announced on June 4 and the exit polls will start on
Saturday after 6 pm when the final phase of polling ends. Street is not ruling
out 10-15% correction if the outcome is not in favour of the incumbent NDA
government.
3)
Heavyweights Drag – The market fall was
triggered by correction in heavyweights, including Reliance Industries (RIL),
Infosys and Tata Consultancy Services (TCS). They were the biggest laggards in
terms of their contribution to the index movement.
4)
Fed Commentary – Neel Kashkari, President of the
Federal Reserve Bank of Minneapolis, said the fact that policymakers were not
ruling out the possibility of further rate hikes seems to have made the Street
nervous. Kashkari said this on Tuesday while underscoring that the US central
bank’s policy stance still remains restrictive. His comments led to an uptick
in the US bond yields.
5)
Asian Markets – The Indian markets took their
cues from their Asian peers as well with many top indices slipping sharply.
Japan’s Nikkei 225 fell by 1.30%, Hong Kong’s Hang Seng corrected 1.34% while
China’s Shanghai Composite slid 0.62%.
Global
Markets –
This led to sharp correction on Wall Street with all three
headline indices closing the Wednesday session in the red. While Dow 30 closed
at 38,441.50, down by 411.32 points or 1.06%, S&P 500 settled at 5,266.95,
down by 39.09 points or 0.74%. Nasdaq Composite fell by over 99.30 points or
0.58% to close at 16,920.60.
Nifty futures opened at 22827.65 points against the previous
close of 22863.00 and opened at a low 22567.25 points. Nifty Future closed with
an average movement of 260.70 points and a decline of around 202.90 points and closed
22660.10 points…!!
At the start of intra-day trading, June gold opened at Rs.72132,
fell from a high of Rs.72132 points to a low of Rs.71634 with a decline of 402 points,
a trend of around Rs.71791 and July Silver opened at Rs.95800, fell from a high
of Rs.95896 points to a low of Rs.93652 with a decline of 2337 points, a trend
of around Rs.93903.
Technically, the
important key resistances are placed in Nifty future are at 22660 levels, which
could offer for the market on the higher side. Sustainability above this zone
would signal opens the door for a directional up move with immediate
resistances seen at 22808 – 22939 levels. Immediate support is placed at 22606 –
22474 levels.
Past Performance is not an Indicator of Future Returns. The
securities quoted are for illustration only and are not recommendatory.Investment
in securities market are subject to market risks. Read Disclaimer and related
all the documents carefully before investing, mentioned on www.nikhilbhatt.in
