Daily Big Picture – Key Indices Scale Fresh All-time Highs; Good Monsoon Forecast Revives Uptrend

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Today’s Action:

The major indices surge to reclaim all-time highs. Uptrend continues in Midcap and Smallcap indices.

Daily Market Review

The benchmark indices posted solid gains in today’s session to mark fresh all-time highs. Maintaining their positive momentum for a third straight session, the key composites built up their early gains boosted by the Indian Meteorological Department’s (IMD) prediction of a good monsoon season in 2017.

The Nifty crossed the 9,400 mark for the first time, to close at 9,407.30. It gained 0.97% in today’s trading session after opening at 9,339.65 points, and traded in the range of 9,336.00 – 9,414.75.

The Sensex also ended on a fresh high at 30,248.17 points, gaining 1.05% by the end of today’s trading session. It started the day off at the 29,988.78 mark, trading in the range of 29,987.44 – 30,271.60.

Both the key indices witnessed high trading volumes in comparison to yesterday’s trading.

The Nifty Midcap and Smallcap indices continue to extend their all-time highs with gains of 0.56% and 0.72%, respectively, today.

The William O’Neil IND 47 Index, which lists the top 47 stocks in chart and fundamental characteristics gained 0.78% in today’s trading session.

Talking of the sectoral indices, all the indices ended up in green apart from Nifty PSU Bank and Nifty IT which lost 0.81% and 0.58%, respectively. Major gainers were the Nifty Media, Nifty FMCG, and Nifty Auto gaining 2.25%, 1.81% and 1.44%, respectively.

After the close of markets yesterday, the Indian Meteorological Department released a statement projecting normal rainfall for the 2017 monsoon season. The country is likely to have 100% rainfall instead of 96% as predicted earlier by the IMD. This news brought cheer to the markets as good monsoon season implies healthy prospects for the Indian economy.

In today’s stock talk we have Bharti Airtel, which reported Q4 FY 2017 results yesterday. The telecom giant’s net profits slumped 72%, y/y, mainly due to the advent of Reliance Jio. Further, it reported a 12%y/y decline in revenues for the quarter. Despite poor performance the stock pared initial losses to rally about 8% by the close of trading.

Indian equity markets have proved their strength yet again by overcoming temporary consolidation to reclaim their all-time highs. The Sensex and the Nifty continue to hold 4.0 and 3.0 distribution days, respectively. However, the concern surrounding high distribution day count has diminished looking at the current state of key indices. Today’s strong up move justifies its current market status of 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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