Closing analysis for the 18th of June

All the three major indices as a whole have seen a slightly higher open today followed by a shaky
trend market and remain in a shaky sentiment market. Though the market is contemplating optimism
on the upcoming Union Budget, I remain cautious and am actively adjusting my trading strategy
with ultra-short trades in long stronger stocks to avoid any murmurs that may arise in the market.
At the close, the Sensex was up 308.37 points or 0.40 per cent to close at 77,301.14. the Nifty
was up 92.30 points or 0.39 per cent to close at 23,557.90. the BANKNifty was up 438.90 points
or 0.88 per cent to close at 50,440.90. the BANKNifty was up 438.90 points or 0.88 per cent to
close at 50,440.90. the BANKNifty was up 438 points or 0.88 per cent to close at 50,440.90. In
terms of sectoral performance, Miscellaneous +10.39 per cent , Speciality Stores +5.76 per cent
and Building Products +5.19 per cent.

I. Technical aspects

The BANKNIFTY index extended its long trend after opening slightly higher. As of now, the 30-minute
price closed at 50120.15 points. Based on our market forecast on Friday, we are still using
49974.75 as the strength reference line. A 30-minute price that stays above that level after
the open represents a continuation of long strength; therefore, today's BANKNIFTY Index showed
signs of long continuation and the overall trend was in line with our forecast.

From the point of view of the time chart, the overall market maintains the oscillating upward
structure, the long force did not show signs of weakness. Daily structure, the first time in
recent times to stabilise 49974.75, from the volume performance, the overall market performance
is good, showing that the market capital to the current price level of recognition and support.

Based on the above analysis, we remain cautiously optimistic about tomorrow's market forecast.
We will continue to use 49974.75 as the strength reference line. If the price can be maintained
above this point, it represents the continuation of the long force; if the price falls below
this point, it indicates the weakening of the long force, at this time, we should focus on the
49424.05 point whether it can provide effective support for the market. Further, the performance
of 30 minutes after the opening of the market can be used as a short-term trend vane. We suggest
focusing on the following key levels:
50562.15: If the price is higher than this level 30 minutes after the opening bell, the bulls'
performance is stronger and the market is likely to continue its uptrend.
49900.20: If the price is lower than this point after 30 minutes after the opening, the bulls
are starting to weaken, and we need to be alert to the possible adjustment pressure on the market.

The NIFTY index opened higher and showed an oscillatory trend with a slight price fall. The
30-minute price at 23565.80 after the opening was still above the long reference line of 23490.40,
representing a continuation of the long position and the overall trend was in line with our
expectations.

Looking at the daily structure, although the overall price has risen, the market performance
is still a high oscillator trend. Special attention should be paid to the fact that the longer
the oscillation, the stronger the performance after the breakout. Therefore, the market's
performance within the current high oscillator range is particularly important. Based on the
above analysis, our forecast for tomorrow's market remains focused on the key levels thirty
minutes after the opening bell:
23579.05: If the price is above this point 30 minutes after the opening, it represents the
continuation of the long force and the market may continue to move up.
23334.25: If the price is lower than this point after 30 minutes after the opening, it means
that the long market is beginning to weaken, and we need to be alert to the possible adjustment
pressure of the market.

Key support level: 23263.90: If the price falls below this point, it may mean a change in
the overall market long force, need to adjust the corresponding trading strategy to prevent the
market from further downside.

The SENSEX index opened higher and retreated slightly. We continue to use the market structure
as our main analytical target, focusing on the key range of 76285.78 points to 76738.89 points.
Prices running above this range indicate that the bulls have the upper hand; if prices fall below
the lower limit of the range, it would mean that the short forces are starting to gain strength.

Looking at the daily chart, there is currently a high cross pattern and the price is holding
above 76738.89. A high cross usually indicates a temporary equilibrium of power between the bulls
and shorts in the market, signalling a possible market shock. As the price remains above 76738.89,
on balance, the bulls have the upper hand in the market.

For tomorrow's market movement, the range of 76,285.78 to 76,738.89 points is still used as an
important reference factor. Price running above this range indicates that the bulls are dominant.
If the price falls below the lower limit of the range at 76285.78, it means that the short-side
forces are beginning to strengthen, and we need to be alert to the possible adjustment pressure
on the market.

And after the opening 30 minutes to pay attention to the offer points, if the price breaks through
today's high of 77366.77 points, on behalf of the continuation of the bulls, the market may
continue to move up; if the price fell below today's low of 77071.44 points, indicating that
the strength of the bulls began to weaken, the need to adjust the corresponding trading strategy
in order to prevent the market from moving further down.

II. News

1.2024 India's merchandise exports grew well in May, up 9.07 per cent year-on-year. It hit a
two-month high. With the global economy recovering, trade is expected to improve this year and
is now back to 2022 levels. The increase in exports will help narrow the trade deficit and improve
the balance of payments, thereby stabilising the Indian rupee. Secondly, the growth in exports,
especially in the non-oil products sector, indicates a recovery in India's manufacturing and
other export sectors, which will lead to employment and investment in related industries,
contributing to the overall growth of the economy. In addition, the recovery in the global economy
will further increase the demand for Indian goods, further fuelling the expansion of the Indian
economy. For the Indian stock market, the positive impact of export growth is equally significant.
Improved export data will enhance market confidence in India's economic outlook and could drive
the stock market higher. In particular, companies and sectors that are closely linked to exports,
such as information technology, chemicals and manufacturing, will benefit directly from the
increase in exports. Increased investor confidence and optimistic expectations about the economic
outlook could prompt more capital inflows into the stock market, further fuelling the stock market
rally.

2. TerraPower has broken ground on a new project to build a next-generation nuclear power plant
using a less complex technology that uses sodium instead of water as the coolant in the nuclear
reactor. Most of the nuclear power projects currently under construction in India use pressurised
heavy water reactor technology. The new Bill Gates-backed TerraPower nuclear power plant project
has important potential implications for the Indian economy. Firstly, the use of advanced sodium
cooling technology will improve the safety and efficiency of nuclear power plants and reduce
dependence on conventional energy sources. This will help India diversify its energy sources
and reduce its dependence on imported fossil fuels, thereby improving the balance of trade and
energy security. Secondly, the expansion of nuclear power plants will create a large number of
jobs in India, not only during construction but also during operation and maintenance, boosting
related industries. The introduction of new technologies is also likely to boost India's
innovation and technological advancement in the nuclear energy sector, enhancing its
competitiveness in the global nuclear energy market. For the Indian stock market, the successful
implementation of TerraPower's new nuclear power plant project could lead to positive market
expectations. Technological breakthroughs and expansions in the energy sector will attract the
attention of investors, especially those focused on clean energy and infrastructure. Companies
involved in nuclear energy, especially those involved in the introduction of new technologies
and the construction of nuclear power plants, will be expected to receive significant share price
gains. In addition, lower energy costs and greater stability in energy supply will help to reduce
operating costs and improve overall economic performance, further boosting stock market
performance.

3. The average amount of microloans increased by 12 per cent in FY2024, with more than 12 per
cent of borrowers receiving loans from four or more lenders, and the total loan portfolio of
MFIs grew by 27 per cent. The share of rural areas in the total loan portfolio has increased
significantly to 61 per cent. This indicates strong demand for borrowing and a vibrant credit
market. However, the surge in large loans and high delinquency rates pose potential financial
risks. While the total loan portfolio has grown by 27 per cent, there has been a decline in loans
below Rs 30,000, indicating a greater preference among borrowers to access larger loans. This
trend, combined with high delinquency rates on larger loans, could increase instability in the
financial system and have a negative impact on the economy. In addition, the share of rural areas
in the total loan portfolio rose to 61 per cent, suggesting that credit is flowing more to rural
areas, boosting the rural economy. However, rising debt could dampen consumption, especially
in rural areas, which in turn could affect economic recovery. For the Indian stock market, changes
in the microfinance market have brought some volatility. Accelerating credit growth has been
an important driver of India's economic growth, fuelling optimism in the market. However, high
delinquency rates on large loans could raise concerns about financial stability, affect investor
confidence and lead to market volatility. In particular, stocks involving microfinance
institutions (MFIs) and financial services companies (FSCs) could be negatively affected by
market concerns about loan quality and solvency. At the same time, the increase in rural credit
has boosted the rural economy, which is good news for companies and industries related to rural
consumption and may drive up related stocks. Thus, the impact of changes in the microfinance
market on the Indian stock market is complex and multifaceted.

4. With the rise in interest rates and the introduction of a carbon tax, the economic policies
of the United States will have global implications, especially for developing countries like
India. Higher interest rates mean higher financing costs, which puts pressure on the Indian
economy, which is dependent on foreign capital and loans, especially in the energy sector.
Currently, India is working to expand its clean energy infrastructure, such as solar and wind
power, but the initial construction costs of these projects are high. High interest rates will
increase the cost of financing these projects and could lead to a slowdown in clean energy projects.
On the other hand, the implementation of a carbon tax will drive the global transition to a
low-carbon economy, and India will need to accelerate its energy mix transition to avoid economic
sanctions or trade barriers due to carbon emissions. This will prompt India to invest more in
clean energy technologies to improve energy efficiency and reduce dependence on fossil fuels,
which will benefit the sustainability of the Indian economy in the long run. The implementation
of high interest rates and carbon tax policies will have a complex impact on the Indian stock
market. Firstly, high interest rates will increase the cost of financing for companies, especially
those that rely on loans for expanding their business and investing in new projects. This could
lead to lower corporate profitability, dented investor confidence and increased stock market
volatility. In particular, companies in the energy, infrastructure and manufacturing sectors
could be hit harder. On the other hand, the carbon tax policy will boost the development of clean
energy and environmentally friendly technologies, which is good news for companies that have
a presence in renewable energy and green technologies. Investors may turn to these companies,
driving up their stock prices. Therefore, although the overall market may be under pressure,
stocks related to green energy and environmental technology may perform better and become the
new hotspots for investors.

5. Wholesale price inflation rose for the third consecutive month to 2.61 per cent in May,
reflecting higher prices for key commodities such as food, crude oil and natural gas. This
inflationary pressure was driven mainly by a significant rise in food prices, particularly for
basic food items such as vegetables, onions and potatoes. Higher food prices can have a direct
impact on the cost of living for a wide range of low-income groups in rural and urban India,
which could lead to a reduction in consumer spending, thereby dampening economic growth. Although
inflation in the fuel and electricity baskets declined marginally, overall inflationary pressures
persisted and inflation in manufactured goods also rose. The Reserve Bank of India has kept
interest rates unchanged, signalling its cautious approach to the current inflationary pressures.
However, if inflation continues to rise, it could force the RBI to raise interest rates, which
would further increase the cost of financing, dampen investment and consumer demand, and affect
the economic recovery. The impact on the Indian stock market is twofold. On the one hand, higher
food and energy prices could lead to higher production costs for companies, thereby compressing
corporate profits, especially for food manufacturing, energy and other manufacturing companies.
This cost pressure could lead to a decline in investor confidence in these sectors and increased
share price volatility. On the other hand, persistent inflationary pressures may force the Reserve
Bank of India to take steps to hike interest rates, which would increase the cost of financing
for corporates and dampen the overall performance of the stock market. However, the decline in
retail inflation could bring some positives to the market, indicating an easing of consumer price
pressures, which could help stabilise market sentiment. Overall, rising inflation and a possible
tightening of monetary policy pose a challenge to the Indian stock market, but it is still expected
to remain relatively stable if the government and the RBI can effectively manage inflationary
pressures and sustain economic growth.