Daily Big Picture – Fiscal Deficit Data Drags The Market Down

Commentary_MarketSmithIndia

Today’s Action:

Benchmark Indices experienced a volatile trading session today, ahead of key GDP data and the expiry of F&O.

Daily Market Review:

Markets were volatile in today’s trading session, as the key indices lost more than 1% amidst uncertainty over the September quarter GDP data. The increase in fiscal deficit figure released today put heavy pressure on banking stocks.

The Nifty started the day lower at 10,332.70 and lost 1.30% to end at 10,226.55. It traded in the range of 10,211.25-10,332.70. The BSE Sensex also shedded more than 450 points today. After starting the day at 33,542.50 it traded in the range of 33,108.72-33,576.20 before settling the day with a loss of 1.35% at 33,149.35.

Talking about broader indices, the Nifty Midcap extended the losses by 0.70% today, while the Smallcap stocks managed to close in green at 0.07% in today’s trading session.

The market breadth, which indicates the overall health of the market was in favor of losers today. On the NSE, 596 stocks advanced and 905 stocks declined. A total of 58 stocks remains unchanged.

In the sectoral chart, apart from Nifty Realty (+1.12%), all the sectors ended in red today. The top most losers were Nifty PSU Bank (-2.31%), PVT Bank (-1.81%), and Financial Service (-1.81%).

The MarketSmith IND 47 Index, our proprietary lists of the top 47 stocks in technical chart and fundamental chart, gained 0.15% today outperforming the major indices.

In the macroeconomic news released today, the fiscal data for the months April to October stood at INR 5.25 lakh Crore, versus INR 4.2 lakh Crore, y/y. For 2017-2018, the government aims to bring the fiscal deficit to 3.2% of GDP.

Both the indices observed a higher trading volume today, thus attracting one distribution day each. Therefore, the total distribution day count increases to four on the Nifty and three on the Sensex, while the Indian market remains in 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.

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