U-Turn: Sensex, Nifty erase gains after hitting record highs

Shares of Kotak Mahindra dropped 2% after US short-seller Hindenburg said that the lender created and oversaw a fund that Hindenburg investors used to short .

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, which rose 2% in the previous session, added 0.7% on the day on renewed hopes of an interest rate cut by the U.S. Federal Reserve in September. , , and Infosys were top gainers from the pack

Expert views
“Nifty has delivered 10.4% returns in the first half of 2024 on top of the 20% returns in 2023. These are impressive returns. An important feature of this bull market which began after the COVID crash of 2020 (Nifty at 7511) is that it has been devoid of any significant correction. The only above 5% correction in the was on June 4th, in response to the election results. But this was followed the very next day by a sharp recovery. This one-way move in the market can be attributed to the successful ‘buy on dips’ strategy being followed by the domestic investors - both institutional and retail. There is sustained flow of money into the market through mutual funds, particularly through SIPs,"said V K Vijayakumar, Chief Investment Strategist, .

He added that So long as this market construct holds steady, the market will remain resilient. It is worth repeating that some stocks in the broader market have bubble valuations and, therefore, they are vulnerable to sharp correction,”

Prashanth Tapse, Senior VP (Research) of Mehta Equities said, “ Nifty is poised to scale above its record high of 24,174, with the Sensex reaching 79,671.58. In Monday's trade, FIIs were net sellers by ₹426 crores, while DIIs bought ₹3,917 crores. Nifty's trading range is expected between 23,500-25,000, with resistance at 24,500 and support at 24,000. Bullish momentum continues, driven by positive factors like India's rising GST collections, above-normal rainfall forecasts, and cooling US inflation. Key US employment data and the upcoming Union Budget will be closely watched.

Crude Oil
Oil prices were little changed on Tuesday, holding near the two-month highs in the previous session, on expectations for rising fuel demand from the summer travel season and possible US interest rate cuts that could boost economic growth.

Brent crude futures rose 20 cents to $86.80 per barrel after gaining 1.9% in the previous session to the highest close since April 30.

Currency watch
The rupee depreciated 12 paise to 83.56 against the US dollar in early trade on Tuesday, weighed down by the strengthening of the American currency in the overseas markets and elevated crude oil prices.

Forex traders said oil importers and foreign portfolio investors (FPIs) bought US dollars amid rising US yields, and this dragged down the local unit.