Today’s Action:
Benchmark indices post small gains in a range-bound session.
Daily Market Review:
India’s stock market finally managed to close in positive territory, bringing an end to a five-session losing run.
The Sensex and Nifty finished today’s range-bound session with gains of 0.1% and 0.2%, respectively.
Broader market indices fared better than their frontline peers as the Nifty Midcap and Smallcap indices pocketed gains of 0.3% and 1.5%, respectively.
On the sectoral front, buying interest was witnessed in a majority of segments. The Nifty PSU Bank (+3.3%), Metal (+1.8%), Media (+1.8%) and Pharma (+1.7%) indices did well today. On the downside, both the Nifty Private Bank and FMCG indices slipped 0.3%.
Coming to the market breadth, advancers outnumbered decliners in a ratio of 4:3.
MarketSmith India’s IND 47 index, our proprietary list of top 47 stocks in chart and fundamental characteristics, gained 1.6%, driven by the strength in the smallcap space.
Talking about market direction, the Indian market remains in an Uptrend Under Pressure. Today’s session had no bearing on the distribution day count, which stays at three on the Nifty and two on the Sensex.
Following five negative sessions in a row, frontline indices have come close to their 50-day lines and it would be encouraging to see if they manage to find support at their 50-DMAs. The Nifty closed 0.5% above its 50-day line, while the Sensex ended 1.3% above its 50-DMA.
Institutional investor action has remained subdued in recent times. Against the backdrop of rising crude oil prices, depreciating rupee, increasing bond yields in the U.S. and domestic political uncertainty, the Indian market has witnessed persistent foreign institutional selling over the past two months.
FIIs have emerged net sellers in 25 out of 26 past sessions, offloading stocks worth Rs 13,000 crore in the past six weeks. This has led to weakness mainly in the midcap and smallcap space.
The Nifty Midcap and Smallcap indices have corrected about 15% and 20% from their all-time highs made on January 15. On the other hand, major indices are down about 5-6% from their highs.
While the general market uptrend is under pressure, broader market indices have seen a massive build-up in distribution days. Both the Nifty Midcap and Smallcap indices are currently in a Downtrend.
Current Outlook:
– Be cautious with any new purchases
– Form a defensive game plan for your portfolio
– Stay disciplined and exercise sound sell rules
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