Daily Big Picture : Nifty Down 2% For the Week; Government Revokes Additional Surcharge on FPIs

Market Pulse

Downtrend

Weekly Action

Nifty, -2.0%; Sensex, -1.7%; Nifty Midcap, -2.9%; Nifty Smallcap, -4%; and Model Portfolio, 0%. 

Weekly Market Review 

Nifty remained bearish for the first four trading sessions, barring some recovery on Friday and closed below 10,900. It remained highly volatile during this week. Yesterday, the market status was changed to a Downtrend from a Rally Attempt as it breached its previous correction low of 10,783. Today, Nifty started 50 points lower than its yesterday’s close but recovered sharply and gained 0.8%. With Nifty closing in the green, we will consider today as day 1 of a Rally Attempt.

On macro news, Finance Minister revoked additional surcharge levied on FPIs and domestic investors. Further, PMO had shown concern over NHAI expanding National Highways in an unplanned and excessive manner and is skeptical about the financial viability of the project on the backdrop of overshooting construction cost. PMO has suggested for the transformation of NHAI into asset management company and expects the NH blue grid point to be prepared for 2030. NHAI should consider each road stretch as a project and create an SPV for the same. On the forex front, the rupee slipped to Rs 72 per dollar, the lowest level in 2019.

On the sectoral front, barring Nifty IT (+2.9%) and Nifty Pharma (+1.3%), all sectors closed negative. Nifty Realty (-7.8%), Nifty PSU (-7.7%), and Nifty Metal (-5.1%) were the top three decliners. In the broader market, Nifty Midcap (-2.9%) and Smallcap (-4%) underperformed this week.

Looking ahead, we would prefer to see Nifty to trade above today’s low for the next two trading sessions. If that happens, we will change the status to a Rally Attempt. From there, we would like to see a follow-through day before changing the status to a Confirmed Uptrend.