Daily Big Picture : Nifty Breaches 21-DMA; Bank Stocks Decline

Today’s Action

Nifty, -0.9%; Sensex, -1%; Nifty Midcap, -0.4%; Nifty Smallcap, -0.9%; and Model Portfolio, -0.9%.

Daily Market Review

Market Status: Rally Attempt 

Nifty opened 50 points lower from yesterday’s close amid continued global uncertainty. It traded below 11,000 through the day, breached its key support of 21-DMA and closed 0.23% below that.

On the macro front, the government has approved export subsidy for 6 lakh metric tonne (LMT) of sugar for 2019-2020 (Marketing year), which will cost the government about 6,268 crore. Further, it relaxed the FDI norms for single-brand retail where opening brick-and-mortar stores will be no more mandatory to start online eCommerce operations. Also, local sourcing requirements will include entire sourcing from India for global operations.

On the sectoral front, Nifty Pharma (+2.3%) gained the most today followed by Nifty Metal (+1.3%) and Nifty Realty (+0.4%). On the flip side, Nifty PSU (-2.7%), Nifty Fin Service (-1.9%), and Nifty Bank (-1.8%) were the top decliners. Out of 1,926 stocks traded on the NSE, 642 advanced, 1,187 declined, and the rest remained unchanged. Nifty Midcap (-0.4%) and Smallcap (-0.9%) also closed in the red. India VIX moderated 2.5%.

Looking forward, we would like to see a follow-through day before shifting the market back to a Confirmed Uptrend. On the flip side, if Nifty breaches its correction low of 10,637, we will change the market status to a Downtrend.

Upcoming event:

Aug 30: GDP growth rate for Q1 FY20

Key News

Sun Pharm.Industries registered 10% y/y top-line growth to Rs 287B on account of steady growth in all its markets. The U.S. market which contributes the highest to the Company’s revenue posted 22% growth y/y whereas growth in emerging markets stood at 11%. The stock closed 5.2% higher.

Piramal Enterprises decided to defer the issue of privately placed non-convertible debentures summing up to Rs 3,000 crore, which includes an option to retain over-subscription of up to Rs 2,500 crore, to a future date. The stock was up 4.5%.

Iifl Finance entered into a deal to acquire 100% of paid share equity capital of L&T capital management at Rs 230 crore (plus cash and cash equivalents). The stock was down 1.5%.

What do you think? Please email us any questions or comments.

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