Markets continued to remain under pressure mainly on the back of weakness in technology and commodities stocks with funds being redistributed to financials, auto, FMCG, and engineering sectors.
The ratio of Bank Nifty to Nifty Service Sector Index has shown a clear turnaround from the downtrend indicating more diversion of flows towards the financial sector while the Nifty Commodities Index may trigger the next leg of the downfall of 23%.
For the Nifty, this would have a major positive impact as financials contribute 35% weightage and this could limit any downside impact in the Nifty 50 index towards 16200 with immediate upside potential seen at 17500 by the coming week.
The fall in commodities stocks is seen as a sign of lowering inflation and may boost the banking sector in the coming days. We expect a blowout rally in Nifty beyond 16600.
The ratio of BanK Nifty to Nifty Service Sector Index & Nifty Commodities Index
Stocks to watch
Positive Read Through
- Vedanta employs the largest lithium-ion battery-powered fleet of 27 forklifts
- Aditya Birla launches digital venture TMRW in the fashion and lifestyle space and enables the next phase of D2C growth in India
- Welspun Corp Says unit East Pipes Integrated Co. in Saudi Arabia wins SAR 490M contract
- Reliance Industries Says unit Reliance Brands to Buy 40% in Plastic Legno’s India Toy Business
- IndusInd Bank Sold part holding in Birla Tyres on May 30, 31, reducing its stake to 3.87%
- Delta Corp Billionaire Jhunjhunwala Cuts Stake in Casino-Operator Delta
- Balaji Amines Unit Balaji Speciality Chemicals approves raising up to INR2.5b in IPO fresh issue
- Ashoka Buildcon Gets Rs 973.7m per conciliation pact with NHAI
- Coal loading to powerhouses increased by 28% in May as compared to last year
- Greaves Cotton- Abdul Latif Jameel International to infuse $150 mn or Rs 1160 crore for a 35.8% stake in the company’s wholly-owned subsidiary Greaves Electric Mobility.
Negative Read Through
- ONGC, OIL- Crude fell sharply overnight, Brent back at USD 113 a bbl
- Hero Moto- May sales at 4.86 lakh units vs estimates of 5.25 lakh units
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