Daily Big Picture – Benchmark Indices Recover Most of Yesterday’s Losses; Nifty Closes in on 9,900

MarketSmith India_William Oneil IndiaToday’s Action:

The key indices opened higher today, and gained strength as the day progressed. Broader indices accompanied the headline indices on the way up.

Daily Market Review

The benchmark equity indices rallied in today’s session, and recovered a major portion of yesterday’s losses. The indices traded in the positive territory throughout the day, helped by positive global cues and stable June quarter earnings season so far. Going ahead, good results with regards to the ongoing Q1 FY 2018 earnings season will be key for the Nifty to push towards the 10,000 mark.

The Nifty opened higher today at 9,855.95. After dipping to an intraday low of 9,851.65, the index gained momentum, reaching an intraday high of 9,905.05, before finally settling at 9,899.60, up 0.74% from yesterday’s closing price. The BSE Sensex, after opening higher at 31,882.80, reached an intraday low of 31,793.72. The index, however, picked up pace as the day progressed, and touched an intraday high of 31,978.89. The index finally settled at 31,955.35, gaining 0.77% from yesterday’s close.

The market breadth, indicating the overall health of the market, was in favor of the gainers, with 1,016 stocks advancing on the NSE, compared with 445 stocks declining, and 66 stocks remaining unchanged.

The broader indices advanced along with the headline indices, as the Nifty Midcap and Smallcap indices gained 0.70% and 1.45%, respectively.

The MarketSmith India IND 47 Index, which lists the top 47 stocks in chart on fundamental characteristics, gained 1.26% in today’s trading session.

On the sectoral front, all twelve sectors closed in the green. The Nifty Pharma, Metal, and Media indices were the standout performers of the day, advancing 2.10%, 1.94%, and 1.86%, respectively.

Today, the Union Cabinet is expected to consider the sale of the government’s 51.11% stake in Hindustan Petroleum Corporation Ltd (HPCL) to Oil and Natural Gas Corporation (ONGC) for over INR 28,000 crore. As per the contours of the proposed deal, HPCL will become ONGC’s subsidiary. Further, HPCL may take over the operations of Mangalore Refinery and Petrochemicals Ltd (MRPL). Currently, ONGC owns 71.6% in MRPL, while HPCL has a 17.0% stake in it.

India’s domestic aviation industry has witnessed double-digit passenger growth for 35 months in a row now. Last month, domestic air passenger numbers in India grew 20.2% y/y, to 9.5 million. The domestic industry load factor has improved to 85.9% in June 2017 compared with June 2016, as Revenue Passenger Kilometer (RPK) growth, at 20.9% y/y, outpaced Available Seat Kilometer (ASK) growth, at 14.0% y/y. While Indigo, operated by Interglobe Aviation, remained the market leader carrying 40.1% of domestic passengers, Spicejet recorded the highest load factor, at 94.5%, achieving 90%+ load factor during the last 26 months.

Today, the Nifty and the Sensex witnessed lower trading volume compared with yesterday’s session. The distribution day count for both the indices currently stands at 2.0, and 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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