Category: Commentary

Posted on

SGX Nifty Indicates Muted Opening; INR Depreciates Against USD

At 8:30am IST, the SGX Nifty Futures was trading at 14,880, compared with Nifty’s close of 14,873, yesterday.

Market status: Uptend Under Pressure

Distribution days: Six

Global stock markets: Dow30, +0.2%; S&P 500, +0.4%; Nasdaq, +1%; Nikkei, +0.4%; Kospi, -0.3%

Yesterday, Nifty opened higher and remained in the green throughout the day. However, the index was highly volatile on account of weekly F&O expiry. At one point, Nifty was up over 1% but it quickly pared gains and ended just 0.4% higher. 62% of the Nifty50 stocks closed in the green led by steel and cement stocks. On the sectoral front, the majority of indices closed in the green. Nifty Metal (+3.9%) advanced the most followed by IT (+1.2%). Financial-related sectors continued to drag the market lower. FIIs net bought shares worth Rs 110 crore, while DIIs net bought shares worth Rs 552 crore.

On Wednesday, Nifty reclaimed its 21- and 50-DMA, and managed to close above it. If Nifty remains above moving averages and advances from there, focus on quality ideas, ideally from leading and/or improving sectors and groups that are emerging from constructive consolidation. Avoid or reduce risk in lagging ideas, trading below major moving averages. On the flip side, we will change the status to a Downtrend, if Nifty breaches its 50-DMA and if market leaders show signs of deterioration in their price actions.

Key News

Zensar Technologies entered into a global strategic partnership with the U.S.-based Claimatic.

Ashok Leyland and Siemens entered into a MoU to build a co-operative technological partnership in the electric commercial mobility segment and execute eMobility projects in India.

Srei Infr.Fin. (Nse)’s Srei Equipment Finance receives expression of interest for up to $250M capital infusion from international PE funds.

INR came under pressure after RBI’s commitment to buy Rs 1T bonds from the secondary markets in Q1 FY22. INR slips to Rs 74.6 per USD.

O’Neil Market Condition Report

For the 24 emerging markets tracked by our institutional research team, the market status breakdown is as follows: Confirmed Uptrend, 30%; Rally Attempt, 12%; Uptend Under Pressure, 52%; Downtrend, 6%.

For the 24 developed markets tracked by our institutional research team, the market status breakdown is as follows: Confirmed Uptrend, 65%; Rally Attempt, 10%; Uptend Under Pressure, 25%; Downtrend, 0%.

Posted on

Nifty Turns Volatile on Weekly F&O Expiry; Financials Drag, Metals Shine

Daily_Market_Outlook

Today’s Action

Nifty, +0.4%; Sensex, +0.2%; Nifty Midcap, +0.5%; Nifty Smallcap, +1.2%; Model Portfolio, +1.4%

Market Pulse: Uptend Under Pressure

Distribution Day Count: Six

Nifty opened higher and remained in the green throughout the day. However, it was highly volatile during the session on account of weekly F&O expiry. At one point, Nifty was up over 1% but it quickly pared gains and ended just 0.4% higher. Of Nifty50 stocks, 62% of the stocks closed in the green led by Jsw Steel (+9.2%) and Tata Steel (+4.9%).

On the sectoral front, the majority of indices closed in the green. Nifty Metal (+3.9%) advanced the most followed by IT (+1.2%). Financial related sectors continued to drag the market down. Broader market outperformed the benchmark indices. The advance-decline ratio was in favor of advancers. Of 2,254 stocks traded, 1,233 advanced, 668 declined, and the rest remained unchanged.

Market Status Overview

Yesterday, Nifty reclaimed its 21- and 50-DMA, and managed to close above it. However, the distribution day count remains high at six. If Nifty remains above moving averages and advances from there, focus on quality ideas, ideally from leading and/or improving sectors and groups that are emerging from constructive consolidation. Avoid or reduce risk in lagging ideas, trading below major moving averages.

On the flip side, we will change the status to a Downtrend, if Nifty breaches its 50-DMA and if market leaders show signs of deterioration in their price actions. If that happens, investors should consider booking profits in stocks that have performed well and have advanced 20–25% from their ideal buy points. Further, stocks slipping below their 50- and 200-DMA on above average volume should be sold. Consider exiting stocks that have declined 8% from your buy price.

Posted on

SGX Nifty Indicates Positive Opening; Muthoot Finance Plans to Raise Rs. 1,700 crore

At 8:00am IST, the SGX Nifty Futures was trading at 14,930, compared with Nifty’s close of 14,819, yesterday.

Market status: Uptend Under Pressure

Distribution days: Six

Global stock markets: Dow30, +0.1%; S&P 500, +0.2%; Nasdaq, -0.1%; Nikkei, -0.4%; Kospi, +0.1%

Yesterday, Nifty opened 100 points higher and reclaimed its 21- and 50-DMA. The volume was relatively higher but below average. Nifty made an intraday high of 14,880 but closed 60 points off highs. On the sectoral front, all indices closed in the green. Nifty Bank, Financial Services, Auto, and IT closed 1.0–1.5% higher. Broader market outperformed the benchmark indices. The RBI’s MPC unanimously decided to keep the repo rate unchanged at 4%. It continued to maintain its accommodative stance as long as necessary to revive growth. FIIs net bought shares worth Rs 227 crore, while DIIs net bought shares worth Rs 381 crore.

Yesterday, Nifty reclaimed its 21- and 50-DMA, and managed to close above it. However, the distribution day count remains high (six), with one expiring today. If Nifty remains above moving averages and advances from there, focus on quality ideas, ideally from leading and/or improving sectors and groups that are emerging from constructive consolidation. Avoid or reduce risk in lagging ideas, trading below major moving averages. On the flip side, we will change the status to a Downtrend, if Nifty breaches its 50-DMA and if market leaders show signs of deterioration in their price actions.

Key News

Muthoot Finance plans to raise Rs 1,700 crore through public issue of secured redeemable non-convertible debentures. The issue opens on April 8.

Hindustan Copper (Nse) opened its QIP issue for subscription on April 7. The floor price has been fixed at Rs 125.79 per equity share.

Prakash Industries achieved the highest-ever sales of around 2,72,142 tonnes of steel in Q4 FY21. Sales grew 8.85% q/q and 31.16% y/y.

O’Neil Market Condition Report

For the 24 emerging markets tracked by our institutional research team, the market status breakdown is as follows: Confirmed Uptrend, 30%; Rally Attempt, 12%; Uptend Under Pressure, 52%; Downtrend, 6%.

For the 24 developed markets tracked by our institutional research team, the market status breakdown is as follows: Confirmed Uptrend, 65%; Rally Attempt, 10%; Uptend Under Pressure, 25%; Downtrend, 0%.

Posted on

Nifty Reclaims 21- and 50-DMA; RBI Keeps Repo Rate Unchanged

Today’s Action

Nifty, +0.9%; Sensex, +0.9%; Nifty Midcap, +1.3%; Nifty Smallcap, +1.7%; Model Portfolio, +1.3%

Market Pulse: Uptend Under Pressure

Distribution Day Count: Seven

Nifty opened 100 points higher and reclaimed its 21- and 50-DMA. The volume was relatively higher. Nifty made an intraday high of 14,880 but closed 60 points off highs. On the sectoral front, all indices closed in the green. Nifty Bank, Financial Services, Auto, and IT closed 1.0–1.5% higher. Broader market outperformed the benchmark indices. The advance-decline ratio was in favor of advancers. Of 2,255 stocks traded, 1,264 advanced, 621 declined, and the rest remained unchanged.

The RBI’s MPC unanimously decided to keep the repo rate unchanged at 4%. It continued to maintain its accommodative stance as long as necessary to revive growth. Reverse repo rate remains unchanged at 3.35%. Marginal standing facility and bank rate remain unchanged at 4.25% each. The MPC maintained its GDP growth forecast at 10.5% for FY22.

Market Status Overview

Today, Nifty reclaimed its 21- and 50-DMA, and managed to close above it. However, the distribution day count remains high (seven), with one expiring tomorrow. If Nifty remains above moving averages and advances from there, focus on quality ideas, ideally from leading and/or improving sectors and groups that are emerging from constructive consolidation. Avoid or reduce risk in lagging ideas, trading below major moving averages.

On the flip side, we will change the status to a Downtrend, if Nifty breaches its 50-DMA and if market leaders show signs of deterioration in their price actions. If that happens, investors should consider booking profits in stocks that have performed well and have advanced 20–25% from their ideal buy points. Further, stocks slipping below their 50- and 200-DMA on above average volume should be sold. Consider exiting stocks that have declined 8% from your buy price.

Posted on

IMF Estimates India’s FY22 GDP Growth at 12.5%; Tata Steel Production Hits New High in Q4 FY21

At 8:00am IST, the SGX Nifty Futures was trading at 14,751, compared with Nifty’s close of 14,683, yesterday.

Market status: Uptend Under Pressure

Distribution days: Seven

Global stock markets: Dow30, -0.3%; S&P 500, -0.1%; Nasdaq, -0.1%; Nikkei, -0.1%; Kospi, +0.2%

Yesterday, Nifty opened 100 points higher and advanced further to make an intraday high of 14,779. Similar to previous few sessions, it succumbed to selling pressure and turned negative intraday. Some buying in the last few hours helped the index close with a gain of 0.3%. Of Nifty50 stocks, 62% of the stocks advanced. Barring Nifty Media and Financial-related sectors, all the sectoral indices closed in the green. Nifty Pharma (+1.8%) and Metal (+1.4%) were the top advancers. The advance-decline ratio was in favor of advancers. Of 2,255 stocks traded, 1,157 advanced, 736 declined, and the rest remained unchanged. FIIs net sold shares worth Rs 1,092 crore, while DIIs net bought shares worth Rs 416 crore.

Nifty breached its 21- and 50-DMA on Monday, after hovering around its key moving averages in the past few weeks. Index breaching its moving averages is a sign of weakness. Yesterday, it found resistance around its 50-DMA. We will change the status to a Downtrend, if Nifty doesn’t retake its 50-DMA and if market leaders show signs of deterioration in their price actions.

Key News

Tata Steel achieved the highest ever quarterly crude steel production of 4.75M tonnes with 3% q/q growth in Q4 FY21.

Reliance Industries’s Jio Infocomm has entered into a definitive agreement with Bharti Airtel to acquire the right to use spectrum in 800MHz band in Andhra Pradesh, Delhi, and Mumbai circles through spectrum trading.

-In Gujarat, night curfew is imposed between 8pm to 6am from today till April 30.

-IMF increased FY22 real GDP growth estimates by 100bps (from January) to 12.5%. However, there is a severe downside risk to the growth outlook for the economy if COVID-19 cases continue to increase.

O’Neil Market Condition Report

For the 24 emerging markets tracked by our institutional research team, the market status breakdown is as follows: Confirmed Uptrend, 30%; [Rally Attempt], 12%; Uptend Under Pressure, 52%; Downtrend, 6%.

For the 24 developed markets tracked by our institutional research team, the market status breakdown is as follows: Confirmed Uptrend, 65%; Rally Attempt, 10%; Uptend Under Pressure, 25%; Downtrend, 0%.