Daily Big Picture – Markets Consolidate Ahead of Fed’s Policy Review

Today’s Action:

The major indices closed flat for a second consecutive day. The Nifty Midcap index retracts from its all-time high, while the Smallcap index extends gains.

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.

Daily Market Review

The benchmark indices drifted directionless in today’s session ahead of the U.S. Federal Reserve’s interest rate decision. Further, investors awaited ICICI Bank’s earnings update that is due later today. After starting the session in green, volatility drove the key indices from positive to negative territories and finally ended marginally lower.

The Nifty closed above the 9,300 mark and ended at 9,311.95 to lose 0.02% in today’s trading session. It opened at 9,344.70 points and traded in the range of 9,298.40-9346.30.

The Sensex declined by 0.09% shedding 26.38 points to close at 29,894.80. Opening at 29,984.95 points, it traded in a narrow range of 29,846.57- 30,020.59.

The Nifty and the Sensex both observed lower trading volume compared to the previous trading session.

Talking about the broader indices, the Nifty midcap retreated from its all-time high coined in yesterday and lost -0.34%, while the Nifty Smallcap index continued its winning streak by gaining 1.07% in today’s trading session. The Nifty Smallcap index reclaimed its all-time high to close the session at 7,532.75.

The William O’Neil IND 47 Index, which lists the top 47 stocks in chart and fundamentals, outperformed the benchmark indices by closing at a gain of 0.24% in today’s trading session.

Coming to sectoral performance, a majority of the sectors ended up in red with only Nifty Realty, IT, and PSU Bank ending up in green gaining 1.55%, 1.25%, and 1.01%, respectively, in today’s trading session. The top losers were Nifty Media, Pharma, and Pvt Bank losing 1.60%, 0.54% and 0.36% respectively.

Investors eye the outcome of the two-day U.S. Federal Reserve meeting that will end today. After having raised the short term interest rate in March, 2017, analysts widely expect no change in the key rate this time around.

In the stock talk, ahead of ICICI Bank’s Q4 FY 2017 earnings update, the stock corrected about 0.9% as investors expected pressure on its earnings owing to higher provisions and slippages. Viewing at another bank, RBL Bank gained about 2% intraday after reporting solid results for the fourth quarter yesterday. It recorded a net profit of INR 130 crore, a 55% y/y jump in Q4 FY 2017. The Bank’s interest income spiked up 47%, y/y, while its loan book grew 39% y/y. Its gross NPAs increased from 0.98% last year to 1.20% in the latest quarter.

On Tuesday, Fitch, global rating agency retained a “BBB-” on India. BBB- rating is the lowest investment grade. It added that India’s weak public finances are the reason for a poor rating. It further forecasted India’s GDP in FY 2017 and FY 2018 to accelerate by 7.7% from FY 2016.

After scaling all-time highs in the last week, the key indices traded sideways with no major movement so far in this week. The distribution day count for the Sensex and the Nifty remains unchanged at 4.0 and 3.0, respectively. The Indian market continues to hold a Confirmed Uptrend status.

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