Trade Setup June 10: Nifty breaks out of consolidation, eyeing 25,600

The Nifty index extended its winning streak for the fourth consecutive day, closing at an eight-month high amid strong market momentum. On the first trading day of the week, the Nifty opened with a sharp upside gap of 157 points, eventually settling above 25,100 levels to close the session at 25,103, marking a gain of 100 points. This is the highest closing level seen in 2025 so far.

Market breadth was broadly positive, with 40 Nifty stocks closing in the green. Leading the charge were heavyweight stocks such as Jio Financial, Kotak Bank, and Bajaj Finance. The Nifty Bank index also reached new heights, surpassing the 57,000 mark for the second consecutive day, signaling robust investor interest in banking stocks.

Midcap and Smallcap indices continued to outperform the benchmark, highlighting strong buying across broader market segments. The Nifty Smallcap index marked its sixth straight day of gains, reaching a fresh five-month high. The Nifty Midcap 100 Index rose by 1.13%, while the Nifty Smallcap 100 Index surged by 1.57%, reflecting investors’ appetite for higher-risk, high-reward stocks.

Sector-wise, all indices except Nifty Realty ended positive. Nifty PSU Banks, IT, and Oil & Gas sectors were the top performers, driven by strong demand. The Reserve Bank of India’s recent decision to cut the repo rate by 50 basis points and the cash reserve ratio (CRR) by 100 basis points fueled gains in banks and NBFCs. Additionally, RBI’s easing of gold loan norms triggered increased buying in gold financiers, with stocks rising between 4% and 8%.

In the automobile sector, companies like Hero MotoCorp and Maruti Suzuki benefitted from the RBI rate cut announcement and registered notable gains. Tata Motors rose 1%, buoyed by an optimistic mid-term outlook. The company projects its commercial vehicle business to capture a 40% market share, with EBITDA margins in the teens and healthy free cash flow generation expected.

On the downside, shares of food delivery players Swiggy Ltd. and Zomato’s parent company Eternal Ltd. slipped 2-3% after reports surfaced about Rapido launching a food delivery pilot in Bengaluru later this month, potentially intensifying competition.

Looking ahead, investors will focus on key economic data, including the US May Retail Inflation (CPI) report scheduled for Wednesday and India’s CPI data due on Thursday. These indicators are expected to influence market sentiment in the near term.

Expert Views:

Market strategists remain optimistic about the Nifty’s prospects. Siddhartha Khemka of Motilal Oswal highlighted that the market’s gradual uptrend is supported by robust corporate earnings, RBI’s liquidity measures, a favorable monsoon forecast, and potential progress in the US-India trade deal.

Nagaraj Shetti from HDFC Securities noted, “A sustained move above 25,200 could pave the way for a further rally toward 25,600.” Immediate support is seen at 24,900 levels.

Rupak De of LKP Securities pointed out the index has decisively broken out from a consolidation phase, with strong support above the 50-day moving average. He added, “A move above 25,350 may trigger further gains toward 25,700, while support lies at 24,850.”

Corporate Updates to Watch:

Capri Global has launched a Qualified Institutional Placement (QIP) to raise up to ₹2,000 crore, including a ₹500 crore upsizing option.

Tech Mahindra announced that Lakshmanan Chidambaram will retire as President of Tech Mahindra Americas, effective June 30, 2025.

Oberoi Realty confirmed the resignation of Pankaj Gupta, Chief Executive Officer - Commercial Real Estate, effective June 9, 2025.

Jana Small Finance Bank has applied to the Reserve Bank of India for approval to voluntarily transition from a Small Finance Bank to a Universal Bank.

With these developments, the Indian markets are poised for further action, keeping investors engaged ahead of crucial global and domestic cues.