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05/06/24 | 10:26 am

Sensex, Nifty rebound in early trade after posting worst losses in four years

Indian benchmark indices opened slightly positive on Wednesday after their worst performance in over four years in the previous session. The BJP’s victory in the recent general elections, marking their third consecutive term, buoyed the markets.

The Sensex and Nifty opened nearly 1% up. Among the Nifty companies, 40 showed advances, while 10 recorded declines.

Hindustan Unilever, M&M, Britannia, ONGC, and HCL Tech emerged as the top gainers, while Hindalco, Powergrid, L&T, Adani Enterprises, and Adani Ports were the top losers.

“The current market pattern indicates a consolidation phase within a broader trading range of 22300 and 21300. It is advisable to consider taking a contra view of going short or long around given levels. Above the 22300 level, resistance is expected around the 50 and 20-day SMAs, positioned at 22400 and 22500 levels. Gradually reduce long positions at each resistance level,” said Shrikant Chouhan, Head of Equity Research at Kotak Securities.

Tuesday’s decline was driven by election results indicating challenges for the ruling BJP in securing a majority. Despite the BJP-led National Democratic Alliance (NDA) leading in over 290 seats, slightly above the 272 required for a majority, it fell short of the approximately 350 seats won in the 2019 election.

This narrower-than-expected victory raises concerns about the new government’s ability to enact reforms vital for sustaining domestic economic growth.

Varun Aggarwal, founder and managing director, Profit Idea, said: “Technical analysis indicates a bearish sentiment, with the Nifty forming a significant Bearish candle on the daily chart, signaling potential further declines if it remains below 22,222. Derivative data reflects mixed sentiments, with specific stocks showing positive setups while others exhibit weakness.”

The stock market’s slightly positive opening reflects cautious optimism amid broader concerns about the new government’s ability to implement crucial economic reforms. Investors and analysts will closely watch market movements and political developments to gauge future trends.

(With ANI input)

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Last Updated: 23rd Jun 2024