Today’s Action:
Benchmark indices reach a new high ground. Broader market follows the suit.
Daily Market Review:
The bulls were in charge again on D-street, as the stock indices continue to make record highs. The Indian market started the expiry week on a positive note and continues to trade higher despite the negative political news of the US government shutdown that began last week.
However, the US market on Friday continued hitting record levels as optimism over the corporate earnings overshadowed the news of the US Government shutdown. Last time, the US government shutdown lasted from October 1-17, 2013. During that shutdown the US market initially fell 4.4% over six sessions and then rebounded 5% over the next six sessions. A small pullback is quite possible in the current state of enthusiasm.
Back home, our domestic barometer Sensex certainly led the way as the stock index gained 0.81% to hit a new high of 35,798, the 50-pack Nifty also advanced 0.66% to reach a new high ground of 10,966 levels. The wide rally was majorly led by companies like TCS (+5.31%), Reliance (+4.32%) and Axis Bank (3.61%). Both the leaders TCS and Reliance made a new high today to touch the market cap of 6 lakh crores.
The buying interest was not limit to large cap, as the midcap and small cap stocks also supported the rally by advancing 0.93% and 0.77%, respectively.
Buoyant by the small and midcap stocks, our proprietary list MarketSmith India IND 47 outperformed, rising 2.14% as 23 names in the index of leading growth stocks increased 2% or more.
Moving the spotlight on sector performance, almost all the sector indices traded higher, barring the Nifty Metal and Nifty PSU Bank, which closed 0.68% lower.
The market breadth was in favor of advances. On NSE, 872 shares advanced against a decline of 662 shares. A total of 39 shares remained unchanged.
After a strong 2017 for stocks (the Nifty roared 28.65%), buyers do not seem to be letting up. Distribution days are minimal, and leading stocks are performing for the most part. The distribution counts for the Sensex and the Nifty remains at one and two, respectively, and constructively trading above its 50-DMA and 200-DMA line. Hence, we are comfortable in keeping the Indian market status at a Confirmed Uptrend.
On the earnings front, Axis Bank profit came at INR 726 crore, an increase of 25% in Q3 FY 2018. Net interest income was up 9.18% y/y at INR 4,732 crore. Provisions and contingencies fell 26% to INR 2,811 crore from INR 3,796 crore a year ago. Asset quality has improved with percentage of gross non-performing asset (GNPA) declining 5.28% compared with the previous quarter.
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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