Today’s Action:
The benchmark indices opened on a positive note in today’s session. The indices remained largely range-bound for the day, before finally closing with small gains.
Daily Market Review
The benchmark indices opened flat with a positive bias in today’s trade, and traded in a narrow range through the day as the global markets remained mostly flat. Both the benchmark indices finally closed for the day with small gains.
The Nifty opened higher today at 9,619.75, and reached an intraday low of 9,607.35. The index recovered as the day progressed, touching an intraday high of 9,643.65 before finally settling at 9,637.60, up 0.25% from yesterday’s closing price. The BSE Sensex, after opening higher at 31,272.72, touched an intraday high of 31,284.64. However, the index failed to hold its gains and declined, reaching an intraday low of 31,177.78. The Sensex almost clawed back to its intraday high in the second half of trade, before finally settling at 31,245.56, up 35.77 points or 0.11% from yesterday’s close.
The breadth, indicating the overall health of the market, was strong, with 1,706 stocks gaining on the BSE, compared with 968 stocks declining, and 142 stocks remaining unchanged.
The broader markets outperformed the headline indices in today’s session. The Nifty Midcap and Smallcap indices added 0.99% and 1.34%, respectively, in today’s trading session.
The MarketSmith India IND 47 Index, which lists the top 47 stocks in chart on fundamental characteristics, gained 1.36% in today’s trading session, outperforming the headline indices and the broader markets.
Among the sectoral indices, gainers outnumbered the losers. The Nifty Realty, Media, and Metal indices led the gainers, advancing 1.54%, 1.15%, and 1.07% respectively, while the Nifty FMCG, and IT indices were the only losers, posting declines of 0.72%, and 0.52%, respectively.
The average assets under management (AUM) of the mutual fund industry rose 7% in the quarter ending June, taking the total AUM to a new high of INR 19.52 lakh crore at the end of June, according to the data from the Association of Mutual Funds in India (AMFI). Fund managers attributed the increase in AUM to robust markets, along with growing investor interest in equities as an asset class. At the end of March, the total AUM stood at INR 18.3 lakh crore, as per AMFI.
NBFCs such as Mahindra & Mahindra Financial Services and Shriram Transport Finance Corporation were up in trade today, as the Central Board of Direct Taxes (CBDT) has issued a circular, clarifying that the receipt of each loan instalment will qualify as a separate transaction, and will not be aggregated, in respect of the ban on cash transactions exceeding INR 2 lakh. There had been ambiguity regarding the loan repayment by customers of financial services companies in cash, as the Centre had banned cash transactions of INR 2 lakh or more from April 1, 2017. “This should come as a significant relief to NBFCs and HFCs, with collections in cash whose operations could have been significantly affected otherwise,” Morgan Stanley said in a note.
According to a Knight Frank India half-yearly report titled “India Real Estate” that was released today, new residential real estate launches in the first half of 2017 crashed by almost 41%, the lowest in seven years, as the sector witnessed a slowdown due to demonetization and the implementation of the Real Estate (Regulation and Development) Act (RERA). The sales volume also declined 11%, y/y, recording the lowest first-half sales in the past five years. Office property transactions also fell 10% to 18.1 million square feet in the first half of 2017.
Reliance Jio is set to bring more disruption in the Indian telecom sector. According to reports, Jio is set to launch 4G VoLTE phone, priced at about INR 500, at Reliance Industries’ annual general meeting scheduled for July 21. A new tariff plan is also reported to be in the offing, as the current Dhan Dhana Dhan offer will end by this month.
Trading volume in the Nifty and the Sensex were lower today, compared with yesterday’s session. The distribution day count for both the indices currently stands at 2.0, and the Indian market 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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