Daily Big Picture – Markets trim their morning gains, broader markets under pressure

MarketSmithIndia-WilliamOneilIndia

Today’s Action:

As a respite to a volatile last week, the markets opened on a positive note. They gave away most of their morning gains by the close of the session, with broader markets closing in red.

Daily Market Review

The markets witnessed a gap-up opening on positive global cues. However, they remained range bound for rest of the day. The broader markets closed in red for the fourth consecutive day and continue to be weak. With 3.0-4.0 distribution day tally and 4-5% off from their recent highs, they remain under pressure.

With a strong opening at 9,480.25, the Nifty trimmed its morning gains to end the session at a piecemeal gain of 0.11% or 10 points. The index closed at 9,438.25 after trading in a wide range of 9,427.90-9,498.65.

With a gap up opening at 30,638.88, the Sensex traded in a wide range of 30,516.87 – 30,712.15. The index closed a very volatile session at a gain of 0.35% or 106 points, at 30,570.97, supported by positive movements in the FMCG and IT sectors.

However, the trading activity was dull for the day, marked by low volumes on both the indices.

The broader indices continue to be weak and are under pressure. The Nifty Midcap corrected 1.12% and is nearly 4.3% off from its recent high. The Nifty Smallcap slipped down 1.82%, and remains 5.4% away from its all-time high.

The William O’Neil IND 47 Index, which lists the top 47 stocks in chart and fundamental characteristics lost 1.47% in today’s trading session, underperforming the Nifty’s performance.

On the sectoral front, the only stocks to close in positive today were the Nifty FMCG and Nifty IT closing at a gain of 3.6% and 0.46%, respectively.  The top three underperforming sectors for today were, the Nifty PSU Bank (-4.17%), Pharma (-1.94%), and Realty (-1.47%).

In about 15 days, the RBI is likely to announce the guidelines to set the NPA ordinance into operation, so as to speed up the recovery of bad loans that have crossed INR 8,00,000 crore.

On Friday post market hours, SBI reported strong Q4 FY 2017 earnings. SBI is responsible for nearly a quarter of the flow of bank credit to the economy, and is indicative of the performance of the other banks in the Indian economy.

The Q4 FY 2017 earning season reporting continued, pushing the broader indices higher on the back of GST reforms.

The Indian market outlook stays at Confirmed Uptrend as the Nifty and the Sensex are trading near all-time highs. They dropped one distribution day each today, on account of expiration, with a revised count of 1.0 and 4.0, respectively.

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