India is likely to become a stock-pickers market in June as local money moves selectively
into certain sectors while bearish bets by overseas investors
limit broader gains, two brokerages said.
The benchmark Nifty 50 ended the May derivatives
series little changed at 23,913.7 points, after months of
volatile trade in which the Iran war led energy shock battered
markets.
For the June derivative series, brokerage Systematix expects
the Nifty to trade between 23,000 and 25,000, while Axis Direct
forecasts a narrower 23,000 to 24,500 band with 24,000 as the
key pivot point.
The May series marked a shift in “market character”,
representing a transition from a short covering-led recovery to
fresh positioning near higher levels, as the blue-chip index
rebounded to stall near the 50-day moving average, Systematix
said.
While share benchmarks remain rangebound, investors are
moving funds between sectors, creating a more constructive setup
for positional and specific trades, said the brokerage.
Derivatives rollover data reinforces the view.
Market-wide rollover stood at 94.2% in the May series,
outperforming three-month and six-month averages, indicating
resilient participation. India’s broader small-
and mid-caps outperformed the benchmark in the
latest series.
Nifty rollover slipped to 70.0% from 71.4% in April, below
its three- and six-month averages, signaling subdued momentum
while Nifty Bank rollover fell to 75.3% from 78.6%.
Foreign investors continue to hold elevated index shorts,
limiting market upside, while local investors remain bullish,
the brokerages said.
The brokerages see metals, pharma and power sectors as
pockets of open-interest-backed accumulation, with IT primed for
a sharp short-covering bounce if crowded shorts begin to unwind.