The broader Nifty traded in a very narrow range at the beginning of the week and on the June series expiry day, it corrected to the lowest level of 10558. The 50-share index retraced back to 10714 mark and closed with a cut of 1% week on week. The mid and small cap indices too slipped 2.23% and 3.44% respectively.

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All sectors except IT, FMCG and Metals ended in the red. Bank Nifty lost 1.50% led by sell-off in the PSU Banks which lost 5.3%. US President Donald Trump's statement on the discontinuity of India and China oil import from Iran by November 2018, led to selling off in oil marketing companies like HPCL, BPCL, IOC, RIL etc. The Energy sector lost 4.40%.

In the last week highlights, Tata Motors hit its lowest level since June 2013. Oil companies like HPCL, BPCL IOC corrected sharply post-surge in crude oil prices and fall in rupee. The domestic currency slumped to the all-time low at 69.09/$ on last Thursday due to macroeconomic headwinds but managed to close at 68.47/$. Meanwhile, Jaiprakash Associates in advance talks with ACC to sell its 5.5mt cement capacity plant for Rs 5,200 crore.

For the month of June, the foreign institutional investors (FII) sold equities worth Rs 10,000 crore while the domestic institutional investors (DII) bought worth Rs 12,000 crore.

The key global events to watch for this week includes the Euro Services and Manufacturing PMI data will be released on Monday while the US Services and Manufacturing PMI, ADP Non-farm Payroll will be declared on Thursday. The US unemployment rate and May month trade balance will be announced on Friday. However, the US markets will remain closed in observance of Independence Day. India’s Nikkei Services PMI to be released on Monday while Nikkei Manufacturing PMI will be announced on Wednesday. The automobile companies will announce their June month sales numbers from Sunday.

Last week Nifty remained in the range of 10558 to 10831, with rollercoaster volatility in the last two sessions. On weekly charts, Nifty made “Hammer” pattern indicates buy on dips. For the week, Nifty has resistance at 10835 and 10888 levels while supports are at 10630 and 10550 levels. Nifty likely trading range between 10500-10850.

MORE VOLATILITY AHEAD

  • For the week, Nifty has resistance at 10835 and 10888 levels  
  • For the month of June, the FIIs sold equities worth Rs 10,000 crore while the DIIs bought worth Rs 12,000 crore  
  • Nifty retraced back to 10714 mark and closed with a cut of 1% week on week

The writer is VP-Retail Research, Motilal Oswal Securities Limited