Daily Big Picture – Benchmark Indices Consolidate with F&O Expiry in View

Today’s Action:

The major indices ended marginally lower after yesterday’s record finish. The NiftyMidcap index ended in a negative zone, while the Smallcap index posted a decent increment.

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

Equity benchmarks slipped into red after opening on a flat note in today’s trading session. Volatility was evident throughout the session, in view of April’s derivative contracts expiry. The Sensex and the Nifty both consolidated after hitting all-time highs yesterday.

After starting the day at 9,359.15, the Nifty fell 0.10% (-9.70 points) and ended at 9,342.15. The trading range observed for the day was 9,322.65-9,367.15. Today was clearly a stalling day for the Nifty, as it declined on a high volume after three back-to-back winning sessions.

The Sensex opened at a new high of 30,141.39 to make another all-time high of 30,184.22 during the day. By the end of the trading session, it lost -103.61 points or 0.34% to close the day at 30,029.74. It traded in a range of 29,973.40-30,184.22

The Nifty recorded high trading volumes compared to yesterday. The Sensex observed a slightly lower volume, thereby escaping a distribution day.

Today, the broader indices witnessed a mixed performance, with the Nifty Midcap index declining marginally by 0.09%, while the Smallcap index gained 0.21%.

The William O’Neil IND 47 Index, which lists the top 47 stocks in chart and fundamentals, ended negative for the second straight session. It gave up 0.37% in today’s session.

Talking about the sectoral indices, the top three performers were the Nifty Pvt Bank, IT, and Media indices, gaining 0.54%, 0.46%, and 0.42%, respectively, while the top three underperformers were Nifty FMCG, Metal and Pharma, losing 0.98%, 0.95%, and 0.95%, respectively.

As widely anticipated by global investors, the U.S. administration released a tax plan on Wednesday, proposing steep cuts in business taxes and discounts on corporate profits brought back into the country. For individuals, the Trump administration proposes to reduce the existing seven tax brackets to three of 10%, 25%, and 35%. Further adding to investors’ joy is the sharp cut in corporate tax to 15% from the existing 35%.

In news from the earnings corner, Maruti Suzuki reported 15.8% y/y increase in its Q4 FY 2017 net profits, backed by a solid uptick in its revenues. Sales during the quarter grew 20.3% y/y, and stood at INR 18,005 crore, largely in line with market expectations. Further, earnings update from Kotak Mahindra Bank for the fourth quarter beat street estimates comfortably. Net profits of the Company jumped 40.3% y/y, pumped by a 16.40% y/y rise in net interest income. However, the asset quality of the bank deteriorated during the quarter, with net Non-Performing Assets rising by 24.6% y/y.

Despite today’s sluggish performance, key indices maintained a healthy position owing to yesterday’s record close. Positive fourth quarter earnings aided key indices in regaining their positive momentum. The Sensex and the Nifty hold a distribution day count of 4.0 and 3.0, respectively. Tomorrow, the Sensex is due to drop a distribution day from its tally due to aging. The Indian market condition is firm in a Confirmed Uptrend.

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