Daily Big Picture – Key Indices Fail to Hold Gains; End Flat for the Day

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Today’s Action:

The benchmark indices made impressive gains during the day; however, ended the day flat. The broader markets underperformed the benchmark indices.

Daily Market Review

After two days of minor losses, the market gained momentum today to head toward a new peak. The Sensex hit a new all-time high of 31,522.87 during the day, while the Nifty reached 10 points shy of its all-time peak. The positive sentiment has been largely on the back of domestic liquidity, hopes of speedy resolution of NPAs and normal monsoon, and the introduction of GST from July 1. However, by the close of the day, the indices pared its gains to close flat.

The Nifty opened higher today, at 9,645.45, and made gains during the day, reaching an intraday high of 9,698.85. However, the index slipped in afternoon trade, reaching an intraday low of 9,617.75, before closing at 9,630.00, down 3.60 points or 0.04% from yesterday’s closing price.

After opening lower at 31,351.53, the Sensex marched higher to hit a fresh life-time high of 31,522.87. Following the Nifty, the Sensex also slipped in the latter half of the session, and hit an intraday low of 31,255.63. The index finally closed at 31,290.74, up 7.10 points or 0.02% from the previous day’s close.

Trading volume on the Sensex was lower than yesterday. In contrast, the Nifty witnessed higher trading volume in today’s session.

The broader markets underperformed today, as the Nifty Midcap and Smallcap indices lost 0.76% and 0.58%, respectively, in today’s trading session.

The MarketSmith India IND 47 Index, which lists the top 47 stocks in chart and fundamental characteristics, lost 0.15% in today’s trading session.

Among the sector indices, Nifty PSU Bank, Financial Services, and Pharma indices advanced 0.54%, 0.29%, and 0.16%, respectively, to become the top gainers. On the flip side, losers outweighed gainers, both in terms of the number of indices, and the magnitude of the moves. The Nifty Realty, Metal, and Energy indices dragged the markets with losses of 1.58%, 1.38%, and 0.73%, respectively.

Yesterday, SEBI tightened norms for participatory notes (P-notes) by levying a fee of USD 1,000 on each P-note issued by foreign investors. The markets regulator also barred the issuance of P-notes for speculative purposes to check any misuse for channeling black money into the Indian market. At the same time, the regulator decided to relax norms for foreign portfolio investors investing directly in the Indian market, rather than through P-notes.

Minutes of the RBI Monetary Policy Committee (MPC) meeting held in June, was released yesterday. The minutes of the meeting showed that members have become flexible in their outlook and ready to be convinced by signs of lower inflation, going ahead. Even as one member of the MPC voted for reduction in the repo rate by 50 basis points, others wanted to see the trend of lower inflation continuing before cutting the policy rates.

The distribution day count for the Nifty continues unchanged from yesterday at 2.0. For the Sensex, a distribution day was dropped due to ageing, and the count now stands at 2.0. The Indian market remains in a Confirmed Uptrend, with the benchmark indices not far from their peaks.

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