Daily Big Picture – Bears Take Charge As Broader Market Slips Further

Today’s Action:

Benchmark composites settle for small losses; Midcap and smallcap stocks bleed further.

Daily Market Review:

Investors had nothing to cheer about as India’s key indices slipped further in today’s session. Amid rumours of long-term capital gains tax becoming a reality once again, market participants resorted to profit-booking ahead of tomorrow’s budget announcement.

While banking stocks helped the key indices to recoup some losses in the final hour of trade, it was not enough to push the composites to positive territory. Nifty ended the day with a loss of 0.2% while the Sensex declined 0.19%.

While major benchmarks settled for small losses, the carnage continued in the midcap and smallcap stocks. Nifty Midcap (down 1.5%) and Nifty Smallcap (down 1.2%) extended their losing streak to five sessions. In recent times, both these indices have come under the pump, accumulating three distribution days as many weeks.

Talking about sectoral performance, apart from the Nifty Energy (0.6%), Private Bank (0.5%),  Financial Services (0.5%) and  Bank (0.4%) indices, all the other sector indices went downhill with Nifty Pharma (-1.9%), FMCG (-1.4%) and Metal (-1.2%) indices emerging as the top losers.

The market breadth remained in favour of losers once again. On NSE, 515 shares advanced against a decline in 983 shares. A total of 44 shares remain unchanged.

The  MarketSmith India 47 index, which is a list of top 47 stocks in chart and fundamental characteristics, declined 2.23% today, mainly on account of weakness in the broader markets.

Dilip Buildcon hogged the limelight in today’s session after it became the lowest bidder for a highway project in Maharashtra and bagged the INR 565 crore order from NHAI.

Idea Cellular gained over 1% intraday on the news that it received the shareholders approval for raising funds. The Company plans to use this fund to provide cashbacks in the form of talktime on smartphones and has partnered with Karbonn mobiles for the implementation of this plan.

Due to higher trading volume, the Nifty added one distribution day today. Sensex managed to escape today’s distribution, as its loss was less than 0.2%. Thus, the distribution count now stands at two on both the indices. Considering that the key indices are still close to their all-time highs and the distribution count is not alarming, 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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