Today’s Action:
Major indices succumb to distribution; broader market underperforms.
Daily Market Review:
One word that is good enough to describe today’s market action would be sloppy.
Despite opening in positive territory, India’s leading indices turned sluggish as both the Nifty and the Sensex slipped 0.3%.
Volume rose on both indices, thereby resulting in a distribution day.
The broader market indices underperformed once again as the Nifty Midcap and Smallcap dropped 0.6% and 1.1%, respectively.
Trade war fears came back to haunt market participants as India raised tariffs on the U.S. imports in retaliation to the latter’s move to hike duties on Indian goods.
Besides trade war concerns, the minutes of the recent RBI policy meet indicated towards inflationary pressure building in the economy, thus dampening the general market sentiment.
The overall market breadth was bearish as losers outnumbered gainers by a huge margin. Out of 2,063 stocks traded on the NSE, 486 advanced, 1,227 declined and 350 remained unchanged.
On the sectoral front, all indices witnessed selling pressure barring Nifty Financial Service. The top losers were Nifty PSU Bank (-2%), Metal (-1.1%), and Pharma (-1%).
Owing to weakness in the broader market, the MarketSmith India IND 47 index, our proprietary list of leading stocks lost 0.7%.
Talking about market direction, choppiness continued to rule the roost as India’s leading indices faced distribution in today’s session. The distribution day count now stands at four on both the Sensex and the Nifty. With frontline indices continuing to trade in a broader range, the market condition remains unchanged at an Uptrend Under Pressure.
For the Nifty, the previous high of 10,929.20 serves as a crucial resistance zone while on the downside, the index seems to have strong support at its 50-DMA. The index closed 0.7% above its 50-day line.
Amid high overhead supply, the broader market indices are finding it tough to move higher. The Nifty Midcap and Smallcap have sold-off 15.3% and 23.2% from their January highs, respectively.
Current Outlook:
– Be cautious with new purchases.
– Form a defensive game plan for your portfolio.
– Stay disciplined and exercise sound sell rules.
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