MARKET PULSE
Status:
Downtrend
Highlights:
One up and four down days
Weekly Market Review:
Selling pressure continued to mount on the Indian market, as the major indices corrected over 2% this week.
The Indian market’s action during the week was similar to a batting collapse in a cricket match, where once wickets start tumbling there is no stoppage.
The week began on a depressing note, as the Nifty breached its February 6 low, leading to a change in market direction to a Downtrend.
The U.S. government’s decision to levy import tariffs on steel and aluminum dampened investor sentiment. As a result, the Indian market’s health deteriorated further in the subsequent trading sessions.
However, Thursday was a bit different, as investors took a sigh of relief and index closed in positive territory as the worries surrounding a global trade war eased out.
Friday’s session turned out to be disappointing for investors as India’s major indices ended the day with small losses despite trading in positive territory for most part of the session. While global equity markets rejoiced Donald Trump’s decision to exclude Canada and Mexico from import tariffs, key indices succumbed to profit-booking in late afternoon trade on Friday.
The pain in broader market was more intense, as the Nifty Midcap and Smallcap deflated 3.8% and 4.5%, respectively.
On the sector front, there was a sea of red as all the sector indices slipped lower. Among all, Nifty Metal, PSU Bank, and Pharma were the worst hit, as the indices lost 6.9%, 5.4% and 4.5%, respectively.
Amid weakness in midcap and smallcap stocks, MarketSmith India’s IND 47 index, our proprietary list of top 47 stocks in chart and fundamental characteristics, declined 5.3% this week.
On the economic front, Nikkei India Services PMI data was released during the week. The seasonally adjusted index fell from 51.7 in January to 47.8 in February, the lowest level since August 2017.
Although, the Indian market is in a Downtrend, the Nifty index did not breach the Wednesday’s low of 10,141. As a result, Friday’s trading session is called as Day 2 and there is a chance we can change the market status to a Rally Attempt provided Nifty manages to hold above Wednesday’s low on Monday. A Rally Attempt begins the third day the index closes higher off the most recent bottom after being in a Downtrend.
During the coming week, the following events could serve as the market movers:
- CPI data for February 2018 on March 12, 2018.
- Index of Industrial Production data for January 2018 on March 12, 2018.
- Wholesale Price Index data for February 2018 on March 14, 2018.
Current Outlook:
– Avoid fresh buys, do not average down
– Protect profits and cut losses
– Build a watch list
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