Stock Market Today: A day after recording their biggest drop in nearly four years, Indian stock market benchmarks Sensex and Nifty 50 staged a remarkable recovery on Wednesday, June 5, as investors digested the results of the Lok Sabha elections and shifted focus to fundamentals and developments surrounding government formation.
The Sensex index rose 2,303 points or 3.20 percent to 74,382.24, while the Nifty 50 index rose 736 points or 3.36 percent to 22,620.35.
Indian stock markets recorded strong gains across all sectors on indications that the BJP-led NDA will form the central government.
Also read: Why is Indian stock market rising after TDP leader Chandrababu Naidu’s comments?
Market sentiment also appears to have been boosted by comments from major brokerages that the election results were a short-term catalyst for the market and would not have a significant impact on long-term growth prospects.
Related article: Lok Sabha Elections 2024 Results: What will BJP’s failure to win majority mean for markets and economy? Foreign brokerages give their views
The medium to long term outlook for the Indian equity market remains attractive due to solid macroeconomic fundamentals, growing domestic investor strength and expectations of interest rate cuts later this year, while the previous day’s market sell-off provided investors with an opportunity to buy shares at relatively low prices.
Not just large cap stocks, the second ranked mid-cap and small cap indices also saw strong gains – the BSE midcap index rose 4.41% and the smallcap index gained 2.93%.
The total market capitalization of all companies listed on the BSE is approximately ₹From nearly 4.08 crore. ₹3.95 lakh crore in the previous session, investors invested around ₹1.3 million crores in one session.
Around 120 stocks, including Mahindra & Mahindra, Bajaj Auto, Hero MotoCorp, TVS Motor Company, Britannia, Dabur, Colgate-Palmolive, Godrej Consumer and Marico, hit their highest 52-week close in intraday trade on the BSE.
Market attention is now focused on the outcome of the ongoing monetary policy meeting. The Reserve Bank of India’s Monetary Policy Committee will begin its three-day meeting on Wednesday, June 5, with a decision expected to be taken on Friday, June 7.
Experts expect the central bank to maintain status quo on repo rates and policy stance.
Also read: RBI MPC meeting begins today: Can the central bank cut repo rate or tweak policy stance in June? Experts offer their views
Today’s Nifty 50 Top 50 Gainers and Losers
In the Nifty 50 index, 48 stocks closed higher today. Shares of Adani Ports (up 7.29%), IndusInd Bank (up 7.06%) and Hindalco (up 6.46%) closed as the top gainers in the index.
The only two stocks to fall on the index were Larsen & Toubro (down 0.10 per cent) and BPCL (down 0.03 per cent).
Also Read: Top Gainers and Losers Today, June 5, 2024: Adani Ports & Special Economic Zone, IndusInd Bank are the most active stocks. Check the full list here
Today’s Sector Indexes
On the NSE, all sectoral indices ended with significant gains.
The Nifty Metals and Private Banking indices surged over 5% each today, while the Nifty Bank, Auto, Financial Services and FMCG indices surged over 4% each.
Expert Market Insights
“Indian markets have registered a brisk recovery led by broad-based buying across sectors and political stability appears to have been secured. However, attention will remain on the formation of the government and upcoming policy meetings of the Reserve Bank of India,” said Vinod Nair, head of research at Geojit Financial Services.
“With food prices set to remain high and government spending expected to rise, the market is expecting no change in the Reserve Bank of India’s policy stance, which has led to a strong rally in FMCG stocks,” Nair said.
Nifty 50 Technical Analysis
Shrikant Chouhan, head of equity research at Kotak Securities, noted that after early morning selling, Nifty/Sensex found support around 21,800/71,900 levels and rebounded sharply.
“Nifty 50 and Sensex have reclaimed 22,500 and 74,000 levels, i.e. the 50-day SMA (simple moving average), respectively, which is broadly positive. We believe the current market structure is extremely volatile. Hence, level-based trading is an ideal strategy for day traders,” Chouhan said.
“For the traders, 22,500-22,400/74,000-73,700 currently act as key support zones while 22,800-22,950/75,000-75,500 are likely to be key resistance zones for the bulls. However, the uptrend will become fragile if the price breaks below 22,400/73,700,” Chouhan said.
Ajit Mishra, senior vice-president, research, Religare Broking, said it will be important for the Nifty 50 index to sustain above the 22,600 level to move towards the 23,000 level. Conversely, the 21,800-22,000 levels should provide support in case of profit booking.
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