Today’s Action:
Leading indices fall prey to late profit-booking; broader market outperforms.
Daily Market Review:
Benchmark composites remained weak throughout the day, before slipping further toward the fag-end of the session.
A weak global market sentiment perturbed investors, as the Sensex and the Nifty posted losses of about 0.5%.
Broader indices fared better once again, with the Nifty Midcap and Smallcap indices posting gains of 0.4% and 0.8%, respectively.
Rising concerns of a trade war between the U.S. and China continued to worry investors across the globe. After imposing import tariffs on steel and aluminum, Donald Trump has hinted towards taking tough measures to curb trade deficit with China.
Coming back to today’s action, weakness was seen across the board, as all the sector indices slipped lower. The Nifty Media (-0.9%), PSU Bank (-0.7%) and FMCG (-0.6%) indices were the top losers today.
Our proprietary list of leading stocks, the MarketSmith India IND 47 index, remained unaffected by the weakness in the leading indices. The IND 47 index scored a small gain of 0.3% today.
The advance-decline ratio favored gainers in today’s session. Of the 1,614 stocks traded on NSE, 982 gained, 559 declined, and 73 remained unchanged.
In the absence of a follow-through day, the Indian market outlook remains unchanged at a Rally Attempt. Both the key indices are still trading below their key resistance of 50-DMAs.
After today’s action, the key composites are not far from their recent lows and any further weakness could see the market moving back in a Downtrend. In such a 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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