Indices snap 3-day gains, Nifty holds 23,250; VIX drops to 16.40

Domestic stocks gave back some gains today, snapping a 3-day winning streak. The party seems to be on pause after the new Modi-led NDA government settled in. Investors are waiting for fresh cues and digesting recent highs. Foreign money is slowly returning to the market, while domestic institutions are taking some profits off the table. Meanwhile, the possibility of a US rate cut is diminishing as the US economy remains strong, which could dampen sentiment if the Federal Reserve does not cut rates as some anticipated.

The barometer index, the S&P BSE Sensex, was down 203.28 points or 0.27% to 76,490.08. The Nifty 50 index shed 30.95 points or 0.13% to 23,259.20.

The Sensex and Nifty 50 clocked an all-time high of 77,079.04 and 23,411.90 in early trade. Sectoral performance was mixed, with media and realty stocks gaining ground, while IT and metal shares declined.

The broader market outperformed the headline indices. The S&P BSE Mid-Cap index added 0.56% and the S&P BSE Small-Cap index gained 1.04%.

The market breadth was strong. On the BSE, 2,590 shares rose and 1,416 shares fell. A total of 123 shares were unchanged.

The NSE`s India VIX, a gauge of market`s expectation of volatility over the near term, slipped 2.87% to 16.40.

Economy:

India`s foreign exchange reserves surged to a new record high of $651.51 billion for the week ending May 31st, according to the Reserve Bank of India (RBI). This represents an increase of $4.837 billion from the previous week. The rise was primarily driven by a $5.065 billion increase in foreign currency assets, which are a major component of the reserves. However, there were also some declines, with gold reserves falling by $212 million and Special Drawing Rights (SDRs) decreasing by $17 million. India`s reserve position with the IMF also saw a minor increase of $1 million.

Numbers to Track:

The yield on India`s 10-year benchmark federal added 0.21% to 7.033 as compared with previous close 7.018.

In the foreign exchange market, the rupee is edged lower against the dollar. The partially convertible rupee was hovering at 83.5225, compared with its close of 83.4075 during the previous trading session.

MCX Gold futures for 5 August 2024 settlement declined 0.42% to Rs 71,050.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, was up 0.47% to 105.38.

The United States 10-year bond yield gained 0.77% to 4.464.

In the commodities market, Brent crude for August 2024 settlement rose 6 cents or 0.08% to $79.68 a barrel.

Global Markets:

European shares declined after investors reacted to EU parliament election results indicates that populist, far-right parties could have a bigger hand in European policymaking over the next five years. Meanwhile, a recent snap election call in France has injected broader political concerns into the market, causing the euro to weaken.

Asian stocks ended mixed on Monday. This shift comes after Friday`s U.S. jobs report, which surprised analysts. The report indicated a stronger-than-expected labor market, with significant job creation and accelerating wage growth. This data has led investors to scale back their expectations of Federal Reserve interest rate cuts happening later in 2024.

Meanwhile, Japan`s revised GDP data for the first quarter (ending March 31, 2024) revealed a contraction of 1.8% year-on-year. This is an improvement from the initial estimate of a 2.0% decline. However, it still signifies a significant slowdown compared to the 0.4% growth observed in the previous quarter. On a quarterly basis, Japan`s GDP fell 0.5%, matching the initial estimate.

U.S. markets closed strong on Friday. The S&P 500 reached a new intraday record high. The Dow Jones Industrial Average gained 0.29%, and the Nasdaq Composite rose 2.38%. Notably, Nvidia`s stock price jumped 10% last week, driven by continued investor enthusiasm for the artificial intelligence leader. This surge pushed Nvidia`s market capitalization past the $3 trillion mark.

The robust U.S. jobs data, released by the Bureau of Labor Statistics (BLS) on Friday, showed the creation of 272,000 new jobs in May. This surpassed analyst forecasts and came after a revised figure of 165,000 jobs added in April. Additionally, average hourly earnings rose 0.4% in May, following a 0.2% increase in April. Year-on-year wage growth climbed to 4.1% in May, compared to the upwardly revised 4.0% reported in April. Generally, wage growth within a 3.0% to 3.5% range aligns with the Fed`s 2% inflation target. The average workweek remained steady at 34.3 hours.

Stocks in Spotlight:

Coromandel International rose 3% after the company unveiled state-of-the-art Nano Fertiliser plant at its Kakinada complex in Andhra Pradesh today (9 June 2024). The unit produces a wide range of NPK grades with annual capacity of 2 million MT of fertilisers and caters to the needs of farming community across India.

JSW Steel rose 0.41%. The company`s consolidated crude steel production decreased 4% to 20.98 lakh tonnes in May 2024 as against 21.78 lakh tonnes recorded in May 2023.

Dr Reddy�s Laboratories rose 0.50%. The company said that US Food and Drug Administration (USFDA) issued form 483 with four observations post inspection at its Srikakulam, Andhra Pradesh manufacturing facility.

Wardwizard Innovations & Mobility (WIML) hit an upper circuit of 20% after the company announced that it has secured a significant order worth $1.29 billion from Beulah International Development Corporation.

Artson Engineering hit an upper circuit of 5% after the company announced that it has bagged a contract worth Rs 126.15 crore from Guwahati International Airport.

Reliance Infrastructure surged 10.67% after the company�s subsidiary, Reliance Velocity (RVL) incorporated Reliance EV Private (REVPL) on 6 June 2024.

KEC International rallied 5.46% after the company announced that it has secured new orders worth Rs 1,061 crore across its various businesses.

Raymond jumped 3.61% after its real estate division gets selected as the preferred developer for redevelopment of MIG VI CHS located in Bandra (East), Mumbai.

Railtel Corporation of India advanced 1.47% after the firm received work order from National Informatics Centre Services Incorporated worth Rs 81.45 crore.

Ahluwalia Contracts (India) advanced 2.64% after it received orders from Birla Arnaa LLP and Indian Financial Technology and Allied Services aggregating to Rs 482.78 crore.

Borosil Renewables shed 0.26%. The company announced that the company will be issuing fully paid-up equity shares aggregating up to Rs 450 crore via rights issue.

New Listing:

Shares of Kronox Lab Sciences closed at Rs 159.35 on the BSE, representing a premium of 17.17% as compared with the issue price of Rs 136.

The scrip was listed at Rs 165, exhibiting a premium of 21.32% to the issue price.

The stock has hit a high of 165 and a low of 156.80. On the BSE, over 3.94 lakh shares of the company were traded in the counter.

IPO Update:

The initial public offer (IPO) of Le Travenues Technology (Ixigo) received 8,51,54,349 bids for shares as against 4,37,69,494 shares on offer. The issue was subscribed 1.95 times.

The issue opened for bidding on Monday (10 June 2024) and it will close on Wednesday (12 June 2024). The price band of the IPO is fixed at Rs 88 to 93 per share. An investor can bid for a minimum of 161 equity shares and in multiples thereof.

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