Key Benchmark Indices Gain as Investors Await RBI Monetary Policy Announcement and Foreign Investment
Key Highlights :
As investors await the Reserve Bank of India's (RBI) monetary policy announcement and foreign investment, the key benchmark indices gained on June 2nd after falling for two days. The American government passed the US debt ceiling legislation, which averted a default, and this helped to strengthen the sentiment in the market. On June 2nd, the Sensex closed 119 points, or 0.19 percent, higher at 62,547.11 while the Nifty ended at 18,534.10, up 46 points, or 0.25 percent. The BSE Midcap index hit its all-time high of 27,322.22 in intraday trade before ending 0.60 per cent higher at 27,294.10. The Smallcap index hit its 52-week high of 30,969.95 in intraday trade and closed 0.57 per cent higher at 30,885.70.
Investors will now watch out for the RBI monetary policy announcement and the moot question is - will the foreign investors continue to boost money into Indian markets? “Markets have been outperforming the majority of their global peers in recent weeks however further deterioration of the trend, especially in the US markets, might change the mood. At the same time, the lack of decisiveness in the banking pack around its record high is hurting the sentiment and its performance would play a critical role in the coming week. Having said that, we reiterate our positive view and suggest focusing on sectors /stocks, which are holding well. On the index front, we expect Nifty to hold the 18,100-18,300 zone in case of any dip while a decisive close above 18,700 would pave the way for a new high," said Ajit Mishra, SVP - Technical Research, Religare Broking.
Sumeet Bagadia, Executive Director at Choice Broking recommends three stocks to buy on June 5 - Bajaj Finserv, Dr Reddy's, and SBI. Bajaj Finserv is presently trading at 1457 and has exhibited a noteworthy performance. Notably, the stock has surpassed all of its short, medium, and long-term exponential moving averages, including the 20, 50, 100, and 200 EMAs. Additionally, it has experienced a breakout above the key level of 1440, demonstrating the stock's ability to sustain this level for a week. Furthermore, the Relative Strength Index (RSI) has remained above 67 and continues to display an upward slope, indicating a strong market sentiment for Bajaj FinServ. Based on our analysis, we anticipate a favorable upward movement for the stock, with a potential target range of 1515-1540. However, it is important to note that our bullish outlook would be invalidated should the stock drop below 1415.
Dr Reddy's has reversed from its base following a respectable consolidation as the Pharma Index rises with a positive tilt on a daily basis. Stock is trading higher than 20 and 50 daily moving averages. The price is also trading above the middle Bollinger band also positive crossover is indicated in RSI and MACD suggests continuity in the bullish trend in the near term. Sustaining high volume, points out buying interest among the short term traders. Hence, based on the above technical structure one can initiate a long position at CMP 4610. However, Closing and sustaining above 4645 will lead towards 4770 levels in coming days. SL can be kept as 4520.
SBI has a strong support at 580 levels. Currently, the stock is trading around 587.20. A smaller resistance is visible on the charts near 590 levels. Once the stock has overcome the previously mentioned resistance, it will be able to move closer to the target price of 605 and higher. The stock is trading above all important moving averages also RSI is trading comfortably at 58 levels indicating strength. The Bollinger band has squeezed and price is trading above middle band and hence price can move further upwards. Based on the above analysis we recommend buying SBI at CMP of 587.20. It can be also added near 580 levels with a medium term target price of 605. Our analysis will be deemed void if price closes below 575 levels.
As investors await the RBI monetary policy announcement and foreign investment, it is important to understand the market sentiment and the stocks that are showing strength. Bajaj Finserv, Dr Reddy's and SBI are stocks that have exhibited a noteworthy performance and are expected to move in an upward trend. However, it is important to note that the analysis and outlook is subject to change and investors should consult a certified expert before taking any investment decisions.
