Today’s Action:
Benchmark indices end flat with minuscule losses. Broader markets witness mild profit-booking.
Daily Market Review
The market witnessed a lackluster session for the second day running in the absence of any major cues.
Today, the Nifty opened higher at 10,160.95. After hitting the day’s peak at 10,171.05, the index sold off reaching a low of 10,134.20. It closed for the day at 10,141.15, down 0.06% from yesterday’s close. Similarly, the BSE Sensex opened higher at 32,467.10 points. After trading in the range of 32,383.82-32,499.88, the index finally settled at 32,400.51, slipping 0.01% from Tuesday’s close.
The market breadth, indicating the overall health of the market, showed the losers taking a lead over the gainers in today’s session. On the NSE, 672 stocks advanced, compared with 787 stocks declining, and 50 stocks remaining unchanged.
The broader indices witnessed some profit booking, as the Nifty Midcap and Smallcap indices slipped 0.23% and 0.45%, respectively.
The MarketSmith India IND 47 Index, which lists the top 47 stocks in chart on fundamental characteristics, lost 0.26% today, underperforming the benchmark indices.
The sectoral chart showed the losers outnumbering the gainers. Only the Nifty PSU Bank, Pharma, and FMCG Indices managed to eke out gains in today’s session, advancing 1.00%, 0.28%, and 0.20%, respectively. Among the losers, the Nifty Auto, Realty, and Pvt Bank indices slipped the most, losing 0.60%, 0.53%, and 0.48%, respectively.
Telecom sector was in focus today as the Telecom Regulatory Authority of India (TRAI) cut the interconnect usage charge (IUC) for all mobile-to-mobile calls to 6 paise per minute from 14 paise currently. The revised charge will be effective from October 1. The regulator has also announced that IUC will be abolished starting January 1, 2020. While the newcomer, Reliance Jio Infocomm, had batted for scrapping the IUC altogether, the older players such as Bharti Airtel had argued for increasing the tariff on the grounds that they are losing money on account of heavy traffic from the Jio network since the actual termination costs are above the current tariff. Reacting to the news, Bharti Airtel and Idea Cellular opened lower by 6.02% and 7.45%, respectively, in today’s session.
In stock news, L&T has secured a pipeline contract valued at close to INR 1,700 crore from the Kuwait Oil Company for engineering, procurement, and construction of a new 48” crude transit line. The project is expected to be completed in the third quarter of 2020.
Tata Steel and Thyssenkrupp AG have signed an MoU for a 50:50 joint venture for their European assets. The deal will see the steel business of the two companies in Europe come together along with Thyssenkrupp’s steel mill services.
Mahindra and Mahindra has signed share purchase agreements for acquiring two companies in Turkey. The Company will buy 100% share capital of Erkunt Traktor Sanayii AS and at least 80% stake in Erkunt Sanayi AS. While the former company sells tractors, the latter operates in the casting and machining industry.
Today, the Nifty observed a higher trading volume compared to yesterday’s session, while the Sensex saw a lower trading volume. The distribution day count stands at 3 for both the Nifty and the Sensex.
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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