Today’s Action:
The benchmark indices extend losses from yesterday’s session. The Nifty Midcap and Smallcap indices correct over 1%.
Daily Market Review
The benchmark indices witnessed selling pressure right from the start of today’s session. After starting in the negative zone, the key indices sunk deeper to erase all gains recorded in the first two sessions of the week.
Today, the Nifty opened lower at 10,132.40, which was also the day’s high. The index extended losses as the day progressed to hit an intraday low of 9,999.25. However, the index managed to hold the 10K mark and settled at 10,013.65, down 0.67% from yesterday’s closing price. Similarly, the BSE Sensex, after opening higher at the day’s high of 32,511.19, touched an intraday low of 32,195.91 in the second half of the session. The index closed for the day at 32,237.88, down 238.86 points or 0.74% from yesterday’s close.
The market breadth, indicating the overall health of the market, was heavily weighed towards the losers in today’s session. On the NSE, 1,202 stocks declined, compared with 455 stocks advancing, and 310 stocks remaining unchanged.
The broader markets underperformed the key indices as the Nifty Midcap and Smallcap indices cracked 1.08% and 1.04%, respectively.
Today, the MarketSmith India IND 47 Index, which lists the top 47 stocks in chart on fundamental characteristics, recorded a sharp decline of 0.97%.
On the sectoral front, the Nifty Energy index was the lone gainer with an increment of 1.22%, in today’s session. On the negative end, financials, pharma, and metal stocks were the most battered. The Nifty PSU Bank, Metal, and Bank indices were down 2.89%, 1.91%, and 1.52%, respectively, by the close of trading.
In macro news, India’s woes of an economic slowdown are reflected yet again in July’s services PMI data. In the data released earlier today, Nikkei India Services PMI Business Activity Index plunged to a four-year low of 45.9 in July 2017, as compared to 53.1 in June 2017. The latest data hints at deteriorating business activity in the services sector following the launch of the GST reform. Lack of knowledge and clarity on the tax reform restricted growth across the sectors.
In the stock talk, earnings announcements continued to flow in with largely positive results reported for Q1 FY 2018. Indian Oil Corporation, Colgate Palmolive, Titan Company, and Bata India reported better than expected earnings. IOC reported a net profit decline of 45% for Q1 FY 2018, with a profit margin of 7.6% during the quarter. The numbers beat the consensus estimates comfortably. Colgate Palmolive, a leader in the toothpaste segment, reported a net profit growth of 8.5% on good operational performance.
Both the key indices recorded distribution days in today’s session owing to high trading volume. The Sensex marked the second consecutive distribution day, today. The revised distribution day count for the Sensex and the Nifty stands at 4.0 and 2.0, respectively. The indices are currently over 1% off their all-time highs. The sudden sloppy movement of the key indices is a threat to the market status which is in 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.
Disclaimer: William O’Neil India Investment Adviser division, is one of the divisions of William O’Neil India Private Limited, which is a company incorporated under the Companies Act 1956. William O’Neil India Investment Adviser division is a registered investment advisor with the Securities and Exchange Board of India and through its online product, MarketSmith Indiaintends to provide quality equity research material and information to its customers. The investments discussed or recommended through MarketSmith India may not be suitable for all investors and hence, you must rely on your own examination and judgement of the stock and company before making investment decisions. Data provided through MarketSmith India is for information purposes only and should not be construed as an offer or solicitation of an offer to buy or sell any securities. Information and discussions made available through MarketSmith India contain forward looking statements that involve risks, uncertainties and assumptions that could cause actual results to differ materially from those contemplated by the relevant forward-looking statement. William O’Neil India Investment Adviser division or its employees / directors or any of its affiliates are not responsible for any losses that may arise to any person who has made investments based on the contents of this document. Past performance never guarantees future results. Investment in equities are subject to market risks and despite the best efforts to provide market leading research, William O’Neil India would like to exhort its users to acknowledge and fully understand the risks involved which might include but not limited to loss of both principal and income. Data and content provided through MarketSmith India is to be consumed only by the intended recipient and must not be redistributed any further.
Registered office address: William O’Neil India, Technomark Building, A-4, NGEF Ancillary Industrial Estate, Graphite India Road, Mahadevapura, Whitefield, Bangalore 560048, Phone: + 91 80 67453802, Fax: + 91 80 6745381, Website: http://www.williamoneil.com/india/, For investor queries:queries@marketsmithindia.com; For grievances: grievances@marketsmithindia.com; For compliance officer:compliance@marketsmithindia.com, Corporate Identity Number: U74999KA2012FTC066881, Investment Adviser SEBI Regn. Nos: INA200005125 valid till 11 July 2021.