Stock Market: June tide brings new high; fund buying lifts sentiment

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By S Jha

New Delhi, May 29: The US equity markets were closed on Monday on account of the Memorial Day, while the Indian indices went soaring, reacting to the debt ceiling deal between President Joe Biden and House Speaker Kevin McCarthy. Nifty closed just a kiss away from the psychological level of 18600, and market participants began speculating of new highs in the index.

The institutional buying in the cash market gained more steam on Monday. The foreign institutional investors bought a net of Rs 1758 crores. Their domestic counterparts too lapped equities worth Rs 854 crores in the cash market. The institutional buying in the equities remains strong amid inflation firmly dipping below the projected rate of the Reserve Bank of India.

Bank Nifty, which had been under pressure for the past few days, also stayed above the level of 44000 to close at 44311, after shedding over 100 points in the late profit booking, as traders took the money because of the US markets being shut. The Bank Nifty gained strongly during the day on the back of all the constituents being in the green, while IndusInd Bank led the rally. HDFC Bank and SBI gave strength to the index.

With inflation coming down and the RBI expected to continue with pause on the rate hike, the realty sector is seen to be a clear winner on the street. The trend is being seen for the past few days. DB Realty gained over 11 per cent on Monday. Mahindra Lifespace Developer too gained over seven per cent. Macrotech Developers – Lodha Group – also gained almost four per cent.

Interestingly, Coffee Day Enterprises has been trending since the day of the Karnataka Assembly election verdict, with the market participants reasoning that the buzz is on account of DK Shivakumar becoming the deputy chief minister of the state. Shivakumar has family ties with promoters of the beleaguered company, which is in debt.

Mahindra and Mahindra, after correcting sharply from its peak, gained over three per cent. Metal space too saw buying interest as the likes of Tata Steel and Hindalco gained smartly.

But the action remains in the midcaps and smallcaps. PSU stocks also continue to be in demand, as the likes of BHEL, Engineers India Ltd, Rail Vikas Nigam Ltd made smart moves on Monday. Stove Kraft, which didn’t report great numbers, also gained strongly, extending the rally in the scrip after it bottomed out in the recent weeks.