Daily Big Picture – Key Indices Hold Ground in a Choppy Session; Focus on RBI’s Policy Outcome

MarketSmith India_William Oneil IndiaToday’s Action:

Benchmark indices extend gains. The Nifty Midcap index trades flat, while the Nifty Smallcap index posts a significant loss.

Daily Market Review

The benchmark indices continued their winning momentum with significant gains in today’s session. After trading in a narrow range for most of the session, the key indices surged higher in the final hour to end the day at a fresh closing high. On numerous occasions, the benchmark indices dipped into the negative territory, as the indices were adrift ahead of the Reserve Bank of India’s monetary policy outcome.

The Nifty opened higher today at 10,091.85. After touching an intraday low of 10,066.15, the index advanced in the last hour, touching an all-time high of 10,128.10 before finally settling at 10,114.65, up 0.37% from yesterday’s closing price. Similarly, the BSE Sensex, after opening higher at 32,579.80, touched an intraday low of 32,463.96. However, the index recorded an intraday high of 32,625.60 and ended the session at 32,575.17, up 60.23 points or 0.19% from yesterday’s close.

The market breadth, indicating the overall health of the market, was tilted towards the losers in today’s session as well. Today, 871 stocks declined on the NSE, compared with 498 stocks advancing, and 65 stocks remaining unchanged.

Broader markets witnessed some selling pressure today, as the Nifty Midcap index ended flat at -0.01%, while the Nifty Smallcap index declined 0.37%.

The MarketSmith India IND 47 Index, which lists the top 47 stocks in chart on fundamental characteristics, closed flat at -0.03%, in today’s trading session.

Among the sectoral indices, barring the Nifty PSU Bank, Energy, and Financial Services indices, which lost 1.35%, 0.07%, and 0.06%, respectively, all indices advanced higher. The Nifty Auto, Metal, and Pharma indices led the gainers, with increments of 1.53%, 0.94%, and 0.43%, respectively.

Today, the market spotlight was on auto stocks after the release of the July auto sales data. The country’s largest car manufacturer, Maruti Suzuki reported a 22% y/y growth in its domestic sales. It sold 1,53,298 units in July compared to last month’s 1,25,764 units. Meanwhile, Mahindra & Mahindra, Ashok Leyland, and Tata Motors achieved sales growth of 6%, 14%, and 7%, y/y, respectively. As a result of healthy sales data, auto shares witnessed strong accumulation at the bourses, today.

Tomorrow, the market focus will be on RBI’s bi-monthly monetary policy meeting outcome. With the macro economic data showing inflation rate at a record low, weakening factory output, and high real interest rate, the country’s apex bank is expected to announce a rate cut at the end of the meeting. Further, the bank’s growth outlook for the economy will be another crucial aspect that will shape markets in the coming sessions.

Trading volume in today’s session was slightly lower than yesterday, as investors await RBI’s outlook on the economy. The Sensex and the Nifty hold a distribution day count of 2.0 and 1.0, respectively. The Indian market condition remains in a 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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