Today’s Action:
Benchmark indices end mixed; Broader markets outperform.
Daily Market Review:
India’s frontline indices were mostly erratic in today’s session. After accumulating decent gains in the first half of the session, both the Sensex and the Nifty succumbed to profit booking in the final hour.
In the end, the Nifty ended the day with a modest gain of 0.05%, while the Sensex closed 0.18% lower.
The Indian market witnessed a divergent trend today, as the broader indices, Nifty Midcap and Smallcap posted solid gains of 0.77% and 1.63%, respectively.
The domestic investor sentiment improved a bit on the back of a strong economic data reported after market hours on Monday. Strong industrial production and softening inflation data diminishes the prospects of an interest rate hike in RBI’s April meeting.
On the sector front, most indices ended the day above its break-even point, barring the Nifty IT (-1.5%) and FMCG (-0.2%). Among all, the Nifty PSU Bank, Realty, and Pharma indices witnessed strong buying action as they posted gains of 2.3%, 1.4% and 1.3%, respectively.
Our proprietary list of leading stocks, the MarketSmith India IND 47 index jumped 1.4% owing to strength in lower-cap names. From the list, Jindal Worldwide got locked in upper circuit, as the scrip saw huge buying interest.
The advance-decline ratio was also favorable to gainers, as seven stocks rose for every three stocks that fell on the NSE.
With today’s subdued trading session, the Indian market outlook remains unchanged at a Rally Attempt. However, the strength seen in midcap and smallcap stocks is certainly encouraging. For now, we continue to wait for a follow-through day.
On the flip side, the benchmark indices are not much far from their recent lows and any further weakness could see the market going back in a Downtrend. In such scenario, we suggest investors to remain cautious until you see a Follow-Through Day or at least strong price action in the leading stocks. Remember, no market uptrend has started without giving a signal in the form of a Follow-Through Day.
Current Outlook:
– Keep a watch list of growth stocks ready
– Wait for the market to follow through or strong price action in leading stocks before acquiring new positions
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