Daily Big Picture – Bull, Bear Standoff Continues As Indices Yawn At PMI Data

Commentary Teaser-02.01.2018

Today’s Action:

The benchmark indices ended mixed. The broader indices trade weaker.

Daily Market Review:

India’s benchmark indices kept their recent nonchalant action on Tuesday, as the key indices once again spent the entire day near the unchanged line. Following the release of the closely-watched Nikkei India Manufacturing Purchasing Managers Index (PMI) data, stocks continue to show lacklustre performance in the second trading session of 2018.

The major averages turned the day into a mixed performance as the Nifty ended the day with a modest gain of 6.65 points or 0.06% at 10,442.20 while the Sensex was down 0.49 points at 33,812.26.

During the trading session, the Indian Government released the factory activity report for December, expanding at a faster pace in five years. As per the report, PMI rose to 54.7 in December (versus November’s 52.6) improving at a strong pace since December 2012. The manufacturing sector also witnessed higher payroll figures in December.

While considering the broader market, both the Nifty Midcap and Smallcap ended on a negative note, declining 0.71% and 0.76%, respectively.

Coming to the sector front, the sectoral indices ended mixed. The top three gainers were the Nifty Metal, IT, and Auto, each closing with gains of 0.60%, 0.32%, and 0.31%, respectively. The top three index losers were the Nifty PSU, Realty, and FMCG, each closing with losses of 1.49%, 1.11%, and 0.57%, respectively.

The market breadth, which indicates the overall health of the market, was also in favour of losers today. On the NSE, 521 stocks advanced and 1,055 stocks declined. A total of 28 stocks remain unchanged.

The MarketSmith India IND 47 list declined 0.59% as most of the names in the index ended on a negative note. However, among all the names, Himadri Special surged the most as it sprinted 9.77% on higher volume.

On the daily chart, both the indices are trading well above its 50- and 200-DMAs, close to their all-time highs. Therefore, the Indian market outlook remains at a Confirmed Uptrend with the distribution count of six on the Nifty and four on the Sensex.

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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