Daily Big Picture – Indian Market Rebounds Despite Trade War Tensions

Today’s Action:

Key indices bounce back from early losses; broader market outperforms.

Daily Market Review:

After a negative opening, benchmark indices traded firmly in the green on the back of strong global cues.

The upward movement was mainly on account of the speculation that the People Bank of China is prepared to take tougher action against the recent plunge in the yuan.

Following the news, major indices in Asian and European markets traded higher.

The U.S. Futures also gained on Tuesday despite a lingering worry about trade war between the U.S. and other major economies. On Monday, the U.S. government moved to block China Mobile for offering its services in the U.S., citing possible national security risks. 

Coming back to the domestic market, both the Nifty and Sensex posted decent gains of 0.4% and 0.3%, respectively. Nifty reclaimed its 50-DMA whereas the Sensex closed 0.5% above its 50-day line.

The broader market fared well as the Nifty Smallcap and Midcap gained 0.7% and 0.9%, respectively.

For a change, gainers outnumbered decliners in a 7-6 ratio on the NSE.

On the sectoral front, there was a divergent trend. Among all gainers, Nifty Pharma (+2%), IT (+1%), and Media (+1%) came on top. On the downside, Nifty PSU Bank (-0.8%), Metal (-0.4%), and Financial Service (-0.2%) were the laggards.

Buoyant by midcap and small cap stocks, MarketSmith India IND 47 index, our proprietary list of top 47 stocks in chart and fundamental characteristics, gained 0.4%.

Talking about the market direction, the distribution day count currently stands at five on both the benchmark indices. For the Nifty, the previous high of 10,929.20 serves as a crucial resistance zone. With the index hovering around its 50-day line, the next level of strong support is around 10,550. The market condition remains unchanged at an Uptrend Under Pressure.

With today’s respite in the broader market, the Nifty Midcap and Smallcap changed their market direction to a Rally Attempt as both the indices traded above its recent lows for three consecutive sessions.

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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