Daily Big Picture – Benchmark Indices Extend Highs; Investors Await RBI Policy Outcome

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Today’s Action:

The Nifty and the Sensex gain to record fresh highs. Broader markets outperform major composites.

Daily Market Review

The benchmark indices started the day on a flat note and gained momentum as the session progressed. Despite a few dips in the mid-session, both the Sensex and the Nifty managed to end the day with decent gains. These gains enabled the key indices to extend their all-time highs.

Opening above the 9,650 mark, the Nifty traded in a range of 9,640.70 – 9,687.20.  The index extended its gain from Friday with an increment of 0.22% and closed at 9,675.10 by the end of the session.

The Sensex opened on a higher note at 31,274.74 and gained 0.12%, to end the day flat at 31,309.49. The index traded in the range of 31,198.37-31,355.42.

Lower trading volume was observed on the Nifty, while the Sensex maintained similar volumes as yesterday. Investors are expected to remain on the sidelines ahead of the interest rate decision.

The Nifty Midcap and Smallcap continued their winning momentum as they added gains of 0.33% and 0.39%, respectively.

The MarketSmith India IND 47 Index, which lists the top 47 stocks in chart and fundamental characteristics, closed at a decent gain of 1.06% in today’s trading session, outperforming the benchmark.

Talking about sectoral composites, almost all the indices closed in green. The top three gainers of the day were Nifty Realty, IT, and Pvt Bank adding 0.77, 0.48%, and 0.44%, respectively. And the only two sectors to close in red were Nifty Metal (-0.60%), Pharma (-0.27%).

The government’s announcement of a 3% GST rate on gold, sent jewellery stocks soaring in today’s session. Investors cheered this news as the tax rate came below market expectation of 5%. As a result, names like Titan Company, PC Jeweller, and Tribhovandas Bhimji Zaveri posted good increments, today. The fast paced developments on GST and the target of its July 1, 2017 deadline will be crucial for the future course of markets.

In the next couple of trading sessions, markets are likely to take a cautious stance in anticipation of RBI’s bi-monthly monetary policy review that is due on June 7, 2017. Keeping in mind the current inflation rate and the positive outlook for the monsoon, the central bank is largely expected to keep the key interest rate unchanged.

The Indian markets continue to hold the status of a Confirmed Uptrend with the key indices trading marginally below their all-time high marks. The Sensex dropped a distribution day due to ageing of its April 28 distribution day. The distribution day count now stands at 1.0 and 3.0 for the Nifty and the Sensex, respectively.

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