The Nifty 50 index is still up nearly 100 points for the week, despite Thursday's bout of profit booking from higher levels. The final 90 minutes of trade saw the index extend losses to not only end below the 18,700, but also below the 18,650 mark. Thursday was also the first drop for the Nifty 50 in five trading sessions.

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Another thing to note here is that while the Nifty 50 index managed to cross Wednesday's high to make a higher high on the charts, it broke below Wednesday's low to make a lower low, although it did manage to hold the level of 18,600 on the downside.

As of yet, with the index still being up on a weekly basis, this could be its fourth straight weekly advance. The last instance of the index gaining four weeks in a row was back in October-November, 2022.

"Technically on the daily chart, the Nifty 50 has formed a long bearish candle," Shrikant Chouhan of Kotak Securities said. This indicates further weakness from current levels. Chouhan expects the technical correction in the index to continue until it trades below the 18,725 mark. "Contra traders can take fresh long positions on the index near 18,550 with a strict stop loss of 18,520," he said.

The final 90 minutes of trade on Thursday also took along with it the Nifty Bank index, which tried remaining above the flat line post the RBI policy decision, but also suffered a bout of profit booking. The index was just 70 points away from its all-time high of 44,498 before it reversed course. The Nifty Bank also closed below the mark of 44,000, said to be a key support, for the first time since June 2.

On the downside, the Nifty Bank index has support placed at levels of 43,700, said Kunal Shah of LKP Securities. A break below this level may attract further downside pressure. Shah believes that the index is stuck in a range with the upper end being 44,500. A break on either side can give it a directional move.

Call writers have strengthened their positions at levels of 44,500 which will continue to act as a key resistance, according to Ashwin Ramani of SAMCO Securities. A break below 44,000 decisively will take the index to its next support level of 43,700.

The Nifty Realty index was the biggest sectoral loser on Thursday, declining by nearly 1.6 percent. Most of the index constituents ended with losses, led predominently by Brigade Enterprises, Sobha, and Macrotech, along with DLF. The index ended with losses for the first time in seven trading sessions. The index gave up all of Wednesday's gains and again closed below the mark of 500.

"The outlook for those looking to buy their first home via a home loan soon remains favourable," said Anuj Puri of the ANAROCK Group post the RBI policy. "A future rate hike, if any, may push the rates into double digits. The persisting financial instabilities in advanced economies of the world may have repercussions in India, causing the RBI to take such a step to face these headwinds," he said.

What Are The F&O Cues Indicating?

Nifty 50's June futures added 3.8 percent or 3.7 lakh shares in Open Interest on Thursday, potentially indicating the formation of fresh short positions. The futures are now trading at a premium of 75.4 points from 72 points earlier. June futures of the Nifty Bank also added 2.8 percent or over 65,000 shares in Open Interest. Nifty 50's put-call ratio currently stands at 1.06 from 1.38.

India Cements is now out of the F&O ban period, while Indiabulls Housing Finance and Manappuram Finance continue to remain in the ban.

Nifty 50 on the Call side for June 15 expiry:

Interestingly, on the call side, out of the money strikes like the 19,600 and 19,700 calls have seen addition in Open Interest for next week's expiry of Nifty 50's contracts. 18,700 and 18,800 strikes have also seen Open Interest addition.

Nifty 50 on the Put side for June 15 expiry:

On the downside as well, out of the money put options have seen addition in Open Interest for next week's expiry. Those are the 17,000 and the 17,500 strikes. The 18,700 and 18,000 strikes have also seen addition in Open Interest.

Lets take a look at the stocks that have seen addition of fresh long positions on Thursday, meaning an increase in price as well as Open Interest:

Lets now take a look at the stocks that saw addition of fresh short positions, meaning a decrease in price but an increase in Open Interest:

Let us take a look at the stocks that are in the news for today's session:

Kotak Mahindra Bank: Sources tell CNBC-TV18 that Canada pension fund is likely to sell 1.66 percent stake in the lender. As of date, it holds 8.6 crore shares in the bank. Deal size at the upper end will be worth $754 million. Part of CNBC-TV18's dealing room chatter on Wednesday.

SBI: Board meeting today to consider fund raising for financial year 2024.

Hindustan Aeronautics: Board to consider stock split on June 27.

Aether Industries: Signs license agreement with Saudi Aramco Tech to commercialise sustainable converge polyols tech

Tata Power: Renewable Energy arm gets Letter of Award to set up 966 MW RTC Hybrid renewable power project for Tata Steel.

NHPC: Arm NHDC gets 525 MW X 6 Hours pump hydro storage site in Khandwa, Madhya Pradesh

What Are Global Cues Indicating?

Asian equities have opened higher on the last trading day of the week as focus now shift to next week's FOMC meeting on June 13-14. The Nikkei 225 index is up 1.5 percent, reversing some of the last two day's losses.

The Kospi is up 0.75 percent, while the Hang Seng is up 0.3 percent. Chinese markets are mixed after the country's Producer Price Index fell 4.6 percent year-on-year, marking the steepest drop since 2016.

All three indices on Wall Street ended higher overnight. While the Nasdaq gained over 1 percent, the S&P 500 and the Dow Jones gained 0.5 percent each.

The Singapore (SGX) Nifty futures, which are an early indicator of how trade is likely to be in India, are currently trading 38.5 points or 0.21 percent higher at 18,759, indicating a positive start to the last trading day of the week.

Foreign investors were buyers in the cash market on Thursday, while domestic investors were sellers by nearly double the amount. Today's numbers are likely to be influenced by the Kotak block deal.

Rajesh Bhosale of Angel One said that it is important to observe whether there is any further profit booking in the early hours of Friday's session. If so, the Nifty 50 index may fall to levels of 18,500 on the downside. In case of no further weakness, Bhosale expects the Nifty 50 to rebound back towards 18,750 - 18,800.

Thursday's swing high of 18,777 could be considered the higher top for this sequence, said Nagaraj Shetti of HDFC Securities. He expects the Nifty 50 to find support near the 10-day and 20-day exponential moving average support clusters of 18,560 - 18,450 levels.

First Published:Jun 9, 2023 6:50 AM IST