Today’s Action:
Market observes a volatile trading session.
Daily Market Review:
Markets today kept investors on their toes as volatility was at its peak. This kind of a movement is normal during earnings season and therefore one should not be dismayed by this movement. The Nifty after having a great run today lost 0.05% while the Sensex lost 0.03%. It is a pertinent fact that markets cannot rise continuously as traders will book profits as they get opportunities to do so; some temporary jitters should not be a big deal in a bull market.
Midcap stocks (-0.14%) have been observing some distribution as investors resort to some profit booking after earning some hefty returns in the recent past. Nifty Smallcap indices traded flat today.
Today apart from Nifty IT (2.24%), Realty (+1.26%) and Metal (+0.07%) all the sectors ended in red. Nifty PSU Banks (-1.38%), Auto (-0.71%) and Media (-0.38%) dragged down the indices most.
Today, the government has allowed 100% FDI under automatic route for single brand retail trading and construction development. Hence, news stocks such as Monte Carlo and Indian Terrain surged more than 5% intraday. Government has also allowed foreign airlines to invest up to 49% via government-approved routes in Air India.
Continuous rise in crude prices could lead to high inflation, which could be bad for most of the industries as they may not pass the inflation to the ultimate consumer. So while investing in equities as an asset class, investors should be proactive in booking profits.
Lumax Industries was in limelight toward the last hour of the trading session as it informed the exchange that its new unit in Sanand, Gujarat, has started the commercial production. This will help the Company increase its sales revenue, which will positively impact the share price in future.
From Pharma, Glenmark Pharma made a presentation at the JP Morgan Healthcare Conference where it announced its intention to scale up its specialty business along with increasing complexity in generics. Pharma as a sector being the talk of the town, investors might look forward to this news positively and keep this stock in their radar.
The market breadth, which indicates the overall health of the market continues to be in favor of losers. Today on the NSE, 611 stocks advanced and 950 stocks declined. A total of 47 stocks remain unchanged.
Our proprietary list MarketSmith India IND 47 outperformed the Nifty, it gained 0.29% today.
Both the Sensex and the Nifty dropped one distribution day due to distribution day reversal (Click on this link to read more about distribution day reversal) on Monday, which means the index closed at more than 5% from the distribution day level and yesterday Sensex dropped one distribution day due to ageing and hence the total count for the Sensex and the Nifty remains at one and three, respectively, while the Indian market condition remains at a Confirmed Uptrend.
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.
To Read Detailed Reports including Stock Recommendations, Idea Lists, Evaluate Stocks etc. Subscribe to MarketSmith India.