Daily Big Picture – Key indices follow broader markets to close in red

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Today’s Action:

General weakness was seen in the overall market today, with the Nifty closing below 9,400 levels. Leading the downtrend, the broader markets shed major gains today and are more than 5.8% off from their recent high.

Daily Market Review

The markets opened flat and remained dull throughout the trading session to close in red. The secondary barometer of the market’s health, the Nifty Smallcap and Midcap continue to be weak, closing in the red for the fifth consecutive day. They gave away major gains and continue to be under pressure.

Extending its losses from the morning session, the Nifty ended the day at 9,386.15, snapping 9,400 levels.  With an opening at 9,445.05, the index traded in a wide range of 9,370 -9,448.05. It remains 1.54% off its all-time high.

Experiencing a sharp fall from the opening mark, the Sensex gave up 0.67% or 206 points by the close of the session. The index opened at 30,553.89 and closed at 30,365.25 and traded in a range of 30,316.92 – 30,610.64. It is currently 1.13% off from its recent high.

The sharp fall in the indices was marked with heavier volumes as compared to yesterday, marking a distribution day in both the indices.

The broader indices continue to be weak and remain under pressure. The Nifty Midcap and Smallcap corrected 1.67% and 2.58%, respectively.

The William O’Neil IND 47 Index, which lists the top 47 stocks in chart and fundamental characteristics lost 2.26% in today’s trading session, underperforming the Nifty’s performance.

Today’s fall was accompanied by weakness in majority of the sectors. The only sectors to close in positive today were Nifty Auto and IT, closing at a gain of 0.39% and 0.05%, respectively. The top three sectors to be beaten down are Nifty Pharma (-3.12%), Nifty Realty (-2.74%), and Nifty Media (-1.85%)

From an NPA of just over INR 2.34 lakh crore in June 2014, the bad loans of 26 public sector banks have expanded to more than INR 6 lakh crore as of December 2016. The RBI deputy governor, K.C. Chakrabarty, in fact, stated that the actual NPA figures could be approximately 20 lakh crore, much higher than the official figures. The RBI announced its plans to expand the scope and size of the Oversight Committee (OC)  and is likely to modify the guidelines on restructuring loans so as to resolve the large stressed assets in the banking system. It marks the beginning of RBI’s step towards implementing Banking Regulation (Amendment) Ordinance, 2017.

A negative outlook for the pharma sector, along with a poor earnings show by a few pharma firms, pulled most of the pharma stocks down today.

The Indian market outlook stays at Confirmed Uptrend as the Nifty and the Sensex are trading near their all-time highs. One distribution day was added to the Nifty and the Sensex each. One Distribution day aged off for the Sensex. The revised count stands at 2.0 and 4.0, for the Nifty and the Sensex, respectively.

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