Daily Big Picture – Benchmark Indices Extend Gains to Close at Fresh Record Highs; Nifty Closes Above 9,900

MarketSmith India_William Oneil IndiaToday’s Action:

The key indices built on their gains from last week, and made new highs in today’s session. Broader indices too witnessed buying interest.

Daily Market Review

The benchmark equity indices extended their all-time highs, led by a surge in stocks across market capitalizations and sectors (except the Nifty FMCG index). The Sensex and the Nifty made modest gains in today’s trade and closed at new all-time highs. The indices also made fresh all-time highs during the session. The Q1 FY 2018 earnings season has already started, and good results will be key for the market to sustain at higher levels.

The Nifty opened higher today at 9,908.15. After touching an intraday low of 9,894.70, the index headed north to touch a new high of 9,928.20, before finally settling at 9,915.95, up 0.30% from yesterday’s closing price. The BSE Sensex, after opening higher at 32,053.98, reached an intraday low of 32,037.21. The index, however, rebounded and touched an all-time high of 32,131.92. The index lost momentum towards the close of the session, before finally settling at 32,074.78, up 0.17% from Friday’s close.

The market breadth, indicating the overall health of the market, was slightly tilted towards the losers, with 711 stocks gaining on the NSE, compared with 748 stocks declining, and 67 stocks remaining unchanged.

The broader indices advanced along with the headline indices, with the Nifty Midcap and Smallcap indices posting gains of 0.18% and 0.56%, respectively.

The MarketSmith India IND 47 Index, which lists the top 47 stocks in chart on fundamental characteristics, gained 0.50% in today’s trading session.

On the sectoral front, barring the Nifty FMCG index, which lost 1.70%, all indices ended in green. The Nifty Realty, IT, and Metal indices led the gainers, advancing 1.48%, 1.12%, and 0.96%, respectively.

The buzz on consolidation in the PSU banking space continues, with the government working on a consolidation plan to create three-four global-sized banks, and reduce the number of state-owned banks to about 12, from the current 21. As part of a proposed three-tier structure, there would be about three-four banks of the size of SBI. Some region-centric banks such as Punjab and Sind Bank, and Andhra Bank will continue as independent entities, along with some mid-size lenders.

Global concerns about the supply overhang in the metals sector continue to linger, as Chinese steel output in June grew 5.7%, y/y, to a record 73.23 million tons, surpassing the all-time high of 72.78 million tons in April, data from the National Statistics Bureau showed. Further, aluminium production in China jumped 7.4%, y/y, to 2.93 million tons, exceeding last December’s record of 2.89 million tons.

Both, the Nifty and the Sensex recorded higher volume in today’s session, compared to Friday. The distribution day count for both the indices currently stands at 1.0, and the Indian market remains in a Confirmed Uptrend.

Current Outlook:

– Market environment conducive for new purchases, but remain selective.

– Focus on fundamentally strong stocks breaking out of strong technical patterns.

– Stay disciplined and exercise sound buy and sell rules.

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