Transcription
Hello friends, welcome to the Evening Report, and the specialty of today's Evening Report is that on one hand, the Nifty went up 100 points on a closing basis due to excellent short covering. There was tremendous short covering in IT stocks. On the other hand, FIIs sold heavily, and there was significant selling in the last hour. Let's understand this. What is the big picture first? After that, we will look at it in detail. So, the big picture is, friends, that despite a weak start, a robust rally in IT stocks and short covering helped the market recover from early losses. The IT index rose over 4%, TCS and Infosys each gained more than 6%, likely driven by sectoral churn and low valuations. VIX declined more than 7% to settle at 15.36, indicating a slight easing of market uncertainty. FIIs sold ₹8362 crore in cash. It's a big number, friends, very close to $1 billion. Although it's a few thousand crores less, it's a very big number that they sold today. Why did they sell? Let's look at this. Today, the Nifty was showing 100 points in the green. Nifty was up 583 points, Bank Nifty only 70 points. Weakness signals were clearly visible in the market right from the start today. Because the market fell sharply on Friday, then fell on Monday, and then opened weak on Tuesday. Because the global setup in the morning was weak. There were talks of conflicts. Hormuz is not opening. Trump is making some statements. "I don't care about Iran and all the ceasefires." The market opened amidst that setup. Asian markets were weak. So, after a weak opening, there was a good smart recovery in the afternoon. You will see that in the chart. This is the heatmap. Let's look at the chart first. See, it was a weak opening, the market was fluctuating there, and then around midday, around 12:12, there was very rapid short covering. The market went up in two-three candles, and after going up, around 2:30-3:00, there was selling again. See how many Ws were formed at the end. That's where the game happened. Initially, no one would have been interested. When the market looked completely flat, no one was interested. As soon as buying came, short covering happened, and at the end, they sold again. We will understand this in detail later. The exact chart pattern is what I am showing you. And see the same pattern in Bank Nifty. The pattern of Bank Nifty was a bit worse. It wasn't very good. It could only recover 70 points. Meaning, it closed in the green with great difficulty. When you look at this in the heatmap, what do you see in the heatmap is that only the IT sector, which is showing dark green here, including TCS, Infosys, HCL, Wipro, Tech Mahindra. All stocks, small and large, had a rally of short covering, and it dragged them up, pulled them up. We should also see who was dragging. When we go to the drag, it's ICICI Bank, Axis Bank, Bajaj Finance. Meaning, there was pressure on rate-sensitive stocks even today. There was pressure on banks. Despite HDFC Bank showing a half percent recovery, because the weight is very high, their contribution of 21 points came. Otherwise, it was only the IT sector. There was trouble in banking. There isn't much recovery in banking because today we are sitting on Tuesday. Leaving aside Wednesday and Thursday, the credit policy is on Friday. So, there is concern in the mind regarding the RBI. An interesting point was that first, look at the IT sector today. If there is a sector of the day, or I would say sector of the month, call it that. There was a big recovery in it. Big recovery means a 4% rally at the sectoral level, and beyond the index, when you look at individual stocks, look at Infosys, close to 6%, and TCS 6.5%. Such a rally in such large big stocks is being seen after a long time. It should be appreciated. But this was short covering, sectoral churning, and we had been discussing this continuously with surveys for the last two weeks. So, what was coming out in the chart was that IT is a sector that can do heavy lifting. That's where the most views were being formed, and very contrarian views were emerging. So, the indication in the chart was that a dead cat bounce, short covering, sectoral churning, whatever you call it, happened here, and because of that, you see a good rally today, and it pulled the entire market up. Otherwise, there was nothing in the market. Banks were not supporting. Reliance was not supporting. Reliance was also down. It closed flat later. If Reliance had also remained a bit down, the weakness would have been even greater. But Reliance, well, it closed flat. This entire picture visible here clearly shows that only IT provided strength. Otherwise, there was nothing in the index, and FIIs took advantage of this. We will see this in the numbers later. So, TCS, Infosys, HCL Tech, Wipro, all saw buying today. One reason for this was also that software stocks worldwide saw a slight rally, a recovery. So, people got hope, thinking, "Okay, there's some strength in this." But I am saying that the fundamental discussion that happens on the IT sector, keep that aside. It has nothing to do with today's rally. Today's rally was purely technical, and you saw it play out very beautifully. Look at the numbers: 319, 297, 2001, 113, and 2032, and 1285. The numbers are good. There was a good rally in selected pockets. Where buying happened, it was good buying; otherwise, it didn't. There was movement in micro-cap stocks, meaning very small stocks, or in some large stocks. But when you look at the broader picture, you still feel that it's like something glittered, and that's why you see that greenery. Exactly like that. Minus IT, there was nothing in the market. Now, if you look sector-wise, Pharma and Nifty were dragging a bit. In the gainers, you see FMCG, Auto, Real Estate, PSU Banks, Metals, a quarter to three-quarters of a percent. And the top sector is 4.2%. Meaning, the top one is 4.2%, and the top two is 2.7%. There was such a gap. That's why I am saying there was nothing in the market except IT. So, on the strength of IT, how much will the market benefit from this rally? Will the Nifty, which came to 23,400-450-450.50, again try to break 23,800, which was its biggest hurdle for the last two weeks? This week again, its testing is happening because now you have three working days left. Wednesday, Thursday, Friday, and on Friday, there is the policy. So, you might see a lot of volatility in the beginning. If there is some harsh commentary, if they adopt a slightly hawkish tone, the market might not like it. So, banking stocks will remain quite volatile. So, for the next three days, Nifty's trial by fire is whether it will cross 23,800 or not. Looking at the FII's stance, it doesn't seem like it. Look at this: ₹8362 crore of selling. It's huge. It's a big number, not a small number. And if you remember the Nifty chart, we just showed that the volatility that happened at the end with a large candle, that's where the game is. DI's supported a lot, ₹9000 crore, meaning exactly, to say, $1 billion of buying from DIIs and less than $1 billion of selling from FIIs. So, the number seems big to me for FIIs because ₹8000 crore of selling is a big number. It's not a joke. You are just matching them, nothing else. The trigger for June is forming. Only two days of trading have happened, June 1st and 2nd. So, look at 12274, 14698, almost equal, running at almost equal levels. The whole month is still left. So, overall, if you look, FIIs have hit a six on an opportunity today. What was happening in other asset classes? There was no great momentum in gold and silver. You can say silver went up a bit by 2000 on MCX because it also came between 7476. It's almost flat. Crude also softened a bit, which had gone up to 95 in the morning. It went to 93. Bond yields went up 0.01%, reaching seven. And our rupee weakened slightly by 101 paise. So, there was no major change in other asset classes that would make the market negative or positive. But FIIs took advantage of whatever happened in the market today and sold it. So, what is the summary of the Evening Report? What happened in the market today? So, what happened in the market today is that after a weak start, the index went up with the help of the IT sector because it is a contributor to the index, and FIIs sold heavily, taking advantage of that rally. Therefore, it will be more difficult for the market to go to the next leg, meaning the next leg when it is trying to break the 23,000-point range for the last two weeks, because whenever the market tries to go up, there is selling from FIIs. So, this is the gist of the entire conversation of your Evening Report, which clearly indicates that FIIs are still actively selling in the market. The next three days will be very important, one of which will be spent on the credit policy. On the same day, your GDP numbers will come in the evening, and after that, the next week will become even more important. Because in the week after that, we will get closer to that date when discussions about the earnings season will begin. Because results will start from July 10th, so there will be discussions for 15-20 days, right? So, all those things, we think, will be quite important. So, net-net, we can say that FIIs have taken advantage of the opportunity today. Now let's see how much strength Nifty shows in the next two days to achieve its next leg of that range. News from the war front, from the economy, from Trump will create volatility. There is no doubt about that. And there was not much strength in mid and small caps today. There was a little bit in very small stocks in micro-caps, but there wasn't much strong trading in mid and small caps today either. So, let's see what happens next. The next two to three days will be very important for the market. But today's game is over, and FIIs have left. Thank you very much for joining this report. We will meet tomorrow morning at 6:55 AM. Until then, thank you very much, and please do tell us in the comments what else you would like to see in this that we can add. Do you want any specific discussion because this is a summary report, and if you feel any point is missing, we can add it. Otherwise, we keep doing your detailing. Thank you so much.