Daily Big Picture – Distribution Hits Nifty; Broader Indices Fightback

Today’s Action:

Nifty succumbs to distribution, while broader indices stage superb recovery.

Daily Market Review:

On expected lines, India’s key indices came under the pump right from the word go. Rising inflation concerns in the U.S. jolted global market sentiment, resulting in a gap-down opening in India’s benchmark indices.

While both the Sensex and Nifty tried their best to recover lost ground in the final hour of the session, weak fiscal deficit data dashed the hopes of market optimists. Eventually, the Nifty and Sensex ended the day with losses of 0.6% and 0.5%, respectively.India’s fiscal deficit for the first nine months of FY 2018 came at Rs. 6.77 lakh crore, touching 113.7% of the full-year target.

When everything was looking gloomy in the Indian market, the Midcap and Smallcap indices rose to the occasion with a superb recovery in the second-half of the session. Both the broader indices managed to limit losses to around 0.1% in the end.

On the sector front, the Nifty PSU Bank and IT index managed to end in green, while all other sector indices drifted lower. Stocks from the private bank, financial services and metal sectors had an off day.

The IND 47 index, which is a list of the top 47 stocks in chart and fundamental characteristics, remained unaffected by market weakness, as it gained 1% today.

The advance-decline ratio was in favour of losers yet again. On the NSE, 598 stocks advanced while a total of 955 declined. Also, 57 names remained unchanged.

Before the fiscal deficit gap disappointed one and all, India’s manufacturing sector growth in February 2018 dipped to a four-month low. Market participants will now shift their focus on the Q3 FY 2018 GDP data that will be announced after-market hours today.

Coming to the market direction, today’s volume on the Nifty surpassed Tuesday’s trading volume, thereby resulting in a distribution day. Now, the distribution day count stands at six on both the key indices. With the 50-day line continuing to act as a strong resistance level, we keep the Indian market status at Uptrend Under Pressure.

Current Outlook:

– Be cautious with any new purchases

– Form a defensive game plan for your portfolio

– Stay disciplined and exercise sound sell rules

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