Benchmark Indices Nosedive After a Solid Opening

Today’s action:

The benchmark indices continue to decline even after a positive start. Broader indices follow the key composites.

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.

 Daily Market Review

The benchmark indices declined significantly for the fourth consecutive sessions after trading in the positive territory for most of the session. The earning season along with rising geopolitical issues kept the investors watchful leading to the fall in the frontline indices.

By the close of markets, the Nifty lost 0.37% (-34.15 points) and closed at 9,105.15. The index traded in the range of 9,095.45 – 9,217.90.

The Sensex declined by 0.32% (-94.56 points) and closed at 29,319.10. The day’s range was observed at 29,286.38 – 29,701.19.

Both the key indices witnessed high trading volume in comparison to yesterday’s trading session. As a result, both the key indices recorded distribution days.

The broader indices also broke their winning streak as they posted losses in line with the frontline indices. Today, the Nifty Midcap and Smallcap indices lost 0.68% and 0.58%, respectively.

The William O’Neil IND 47 Index, which lists the top 47 stocks in chart and fundamentals, fell by 0.88% at the end of today’s trading session.

By the close of markets, the sectoral chart displayed a depressed picture with Nifty Realty, Metal and Pharma indices being the biggest losers. Nifty Bank and Pvt Bank indices were the only indices that managed to end the day with marginal increments.

As a result of the good earnings update, shares of Gruh Finance rose about 6.5% today. The Company’s net profits grew 25.8%, y/y, in Q4 FY 2017. The performance came ahead of street estimates, resulting in heavy accumulation of its stock. Other major results update slated for today is of Tata Consultancy Services. After a sluggish earnings update by Infosys in the last week, the performance of TCS will be crucial to gauge the outlook of the IT segment of the country.

Weak global cues continued to plague the Indian equity markets for the past couple of weeks. A good earnings season is much needed to lift key indices above their recent highs and continue the market uptrend. The key indices piled up an additional distribution day today taking the total distribution day count for the Sensex and the Nifty to 5.0 and 4.0, respectively. The indices are trading in close range from their 50-Day Moving Average. If the key indices breach their 50-DMA lines, it will warrant a change to the current market status of a Confirmed Uptrend.

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