Today’s Action:
Frontline indices concede early gains; end 1.1% down in a disappointing session.
Daily Market Review:
Market bears returned to the scene, as India’s key stock composites snapped a two-session winning streak in today’s trade.
China’s decision to impose import tariffs of 25% on 106 U.S. products resulted in fresh worries over a trade war between the two leading countries. China’s move came in retaliation to the U.S. decision to slap 25% tariff on 1,300 Chinese products.
After a promising start, the Indian benchmark indices erased early gains, leaving market optimists high and dry with losses of 1.1% in the end.
Broader indices were also caught in bear’s grip, as the Nifty Midcap and Nifty Smallcap tumbled 1.2% and 1.4%, respectively.
On the sectoral front, only Nifty Auto managed to save its face with a gain of 0.4%. All other sector indices succumbed to selling pressure, with Nifty Metal, Media and Bank indices slipping 2.6%, 1.7% and 1.6%, respectively.
Our proprietary list of leading stocks, the MarketSmith India {IND 47 index} fell in line with the benchmark indices, losing 1% in today’s trading session.
The advance-decline ratio was back in favour of losers today. Of the 1,571 stocks traded on the NSE, 584 gained, 947 declined, and 40 remained unchanged.
The silver lining in today’s session was Skymet’s forecast of a normal monsoon this year. Reacting to the development, fertilizer stocks jumped higher, before giving up most of the gains owing to market weakness.
Today’s market action seems to have dashed hopes of a market recovery in the near future. Both the key indices are finding it hard to retake their 50-day lines. The Nifty breached its 200-DMA in today’s session. For now, the market status remains unchanged at a Rally Attempt. The risk of the market going back in a Downtrend continues to loom. If the Nifty breaches its March 23 low, the market status will be moved back into a Downtrend.
Market participants will keep a close eye on the RBI’s first bi-monthly interest rate decision of FY 2019, which will be announced tomorrow.
Current Outlook:
– Keep a watch list of growth stocks ready
– Wait for the market to follow through or strong price action in leading stocks before acquiring new positions
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