Stock Market: Eye on US debt ceiling outcome, sideway theme visits street

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By S Jha

New Delhi, May 31: The global cues are likely to prevail over the street, as the US debt ceiling deal, principally approved, reveals further details in the next few days. The US bourses also remained almost flat, recovering the early losses, after opening a day after the Memorial Day holiday.

Nifty by closing above 18600 level is seen to have given confidence to the market participants to stay positive with the market. Bank Nifty has been able to hold its record high level to close above 44400 level. On Tuesday, Bank Nifty showed more strength than Nifty.

Reports from the US claimed that the debt ceiling deal may involve a cut in $1 trillion of spending. If true, the US may be undoing the pandemic splurge, which will also kick the economy harder. This could be negative for sectors in India which are dependent on the US market.

At the same time, the reports also suggest that the market participants in the US are also expecting the Federal Reserve to stay on the rate hike moderation path, which may bring relief to the street, both in America as well as emerging markets.

Nasdaq has been on a gaining spree in the month of May, rising by over six per cent, largely with the help of the chip-makers, as Nvidia briefly became a $1 trillion company, sixth such entity in the coveted club. Six such top companies have nearly a combined valuation of $11 trillion. Only the US and China economy are larger than the combined valuation of these six companies – Apple, Microsoft, Aramco, Alphabet, Amazon and Nvidia.

While the fund actions remain positive to give depth to the equity markets in India, March quarterly results are guiding the stock specific performances. Two of the high flying railway stocks – IRCON and Rail Vikas Nigam Limited – lost almost five per cent in the Tuesday trading session. Hikal, while reacting to its March numbers, gained over eight per cent.

Ujjivan twins – small finance and financial – were smart gainers on Tuesday, rising by over seven per cent. The twins have been gaining fund actions for the past few weeks.

Kaynes Technology, a contract manufacturer in the league of Dixon Technology, continues to trend higher, netting another four per cent rise in the Tuesday session to close at a record high. The scrip has been gaining since reporting its March quarter numbers a few days ago.