Daily Big Picture:Nifty Ends Below 9,000; Pharma Index Up 45% From its Lows

Today’s Action

Nifty, -1.3%; Sensex, -1.5%; Nifty Midcap, -1.4%; Nifty Smallcap, -0.6%; Model Portfolio, +0.9%

Market Pulse Confirmed Uptrend

Nifty opened on a flat note and quickly lost around 100 points and made an intraday low of 8,912. However, it pared some of its losses and closed slightly below 9,000. Nifty escaped distribution as today’s volume was lower than the previous session. 

Barring Nifty Pharma (+2.8%) and Metal (+1.9%), all sectoral indices closed in the red. Nifty Pharma rallied ~45% from its lows. On the flip side, Nifty Realty (-4.9%), Media (-3.3%) and Financial Services (-3.1%) were the major decliners. The advance-decline ratio was in favor of advancers. Of 2,126 stocks traded, 952 advanced, 854 declined, and the remaining traded flat.

We continue to be very selective about taking any fresh positions. It is important that investors don’t play all their cards at once. We would suggest adopting an investment approach where you begin with a small allocation and increase it as and when the market advances further. 

Without trying to predict and decode stories, we will take what the market gives us and continue to monitor unfolding conditions. Stocks with higher relative strength and superior fundamentals can do well. Some leading stocks have sharply corrected. Wait for them to put in at least a short period of consolidation and show a constructive breakout from that range. Buying without this period of constructive behavior into a straight upmove off the bottom, puts you at a risk of drawdown.

Key News

According to SIAM data, passenger vehicles sales for FY20 declined 18% whereas it declined 51% y/y for March. Commercial vehicles sales declined 29% for FY20 and 88% for March.

Dr Reddys Labs. (Nse) launched the blood cancer drug Invista in India. These tablets are used for the treatment of Chronic Myeloid Leukemia.

Bandhan Bank’s total deposits grew 32% y/y to Rs 57,073 in FY20. Retail deposits grew 34% in the same period and form 78.4% of the total deposits.

Disclaimer: Information contained herein is not and should not be construed as an offer, solicitation, or recommendation to buy or sell securities. It is for educational purposes only.

Market Update: After 7 Weeks of Decline, Nifty Finally Sees Weekly Gain

Weekly Action

Nifty, +12.7%; Sensex, +12.9%; Nifty Midcap, +10.9%; Nifty Smallcap, +9.6%; Model Portfolio, +2.1%.

Market Pulse Confirmed Uptrend

Weekly Market Review

Nifty made a halt to seven straight weeks of decline and closed the week with a gain of more than 12%. The index started the week on a strong positive note and recorded additional follow through day as it gained about 8.8%, on higher volume than the previous session. The index closed in negative on Wednesday. Today, Nifty staged a reversal and closed the day near the day’s high holding significant gains.

All the sectoral indices closed in positive territory for the week. Nifty Auto (+23.1%) led the gains followed by Nifty Pharma (+19.4%) which continued the gaining momentum. Further, Financial stocks staged a reversal with Nifty Pvt Bank, Nifty Bank, and Nifty Financial gaining more than 14% each.

We continue to be very selective about taking any fresh positions. It is important that investors don’t play all their cards at once. We would suggest adopting an investment approach where you begin with a small allocation and increase it as and when the market advances further. Without trying to predict and decode stories, we will take what the market gives us and continue to monitor unfolding conditions. Stocks with higher relative strength and superior fundamentals can do well. Some leading stocks have sharply corrected. Wait for them to put in at least a short period of consolidation and show a constructive breakout from that range. Buying without this period of constructive behavior into a straight upmove off the bottom puts you at the risk of a drawdown.

Disclaimer: Information contained herein is not and should not be construed as an offer, solicitation, or recommendation to buy or sell securities. It is for educational purposes only.

Industry Update : May 2019

In May, Nifty was volatile and made a high-low of 12,041–11,281, and advanced 1.5%. On May 8, the market status was downgraded to an Uptrend Under Pressure. Markets progressed well after the exit poll numbers were out and final results, which gave the mandate for a stable government. On May 27, Nifty reclaimed its previous rally high of 11,857 and market status was upgraded to a Confirmed Uptrend. FIIs/FPIs were net sellers in May (Rs 2,200 crore) for the first time in 2019 on a monthly basis, while the net purchase from DIIs was more than Rs 5,000 crore.

Of the 48 developed and emerging markets we track, at the end of April, 34 were in a Confirmed Uptrend and none of them were in a Downtrend. But by May end, only nine were in a Confirmed Uptrend and 17 in a Downtrend, indicating weakness in global markets. Continue reading “Industry Update : May 2019”