Daily Big Picture : Nifty Consolidates Near 12,000; Realty and Metal Stocks Gains, PSU Banks Underperform

Today’s Action

Nifty, +0.4%; Sensex, +0.5%; Nifty Midcap, +0.7%; Nifty Smallcap, +0.5%; Model Portfolio, +1.6%.

Daily Market Review.

Market Status: Confirmed Uptrend

Nifty opened higher and hovered around 12,000. Volumes were comparatively low. In the last few sessions, Nifty has been consolidating gains near 12,000. But this is constructive as Nifty is up 8% in the last one month after it rebounded sharply from its 50-DMA. Also, the index has not added any distribution day after October 22.

There was positive action in the broader market. Nifty Midcap and Smallcap gained 0.7% and 0.6%, respectively. However, gains were concentrated on selective stocks and the improvement in market breadth was not good. Realty and housing finance stocks gained after the government’s approval to set up Rs 25,000 crore bailout fund to finance 1,600 stalled housing projects to boost the economy by kickstarting incomplete projects.

On the sectoral front, Nifty PSU Banks (-1.5%) continued to lag. Nifty Realty (+0.9%) and Metal (+1.1%) were the major gainers. Metal stocks were up after positive development in the U.S.-China trade talks. Advance-decline ratio was leaned toward advancers. Of 2,146 stocks traded on the NSE, 943 advanced, 845 declined, and the rest remained unchanged.

Looking forward, we continue to be positive on the market and recommend increasing risk as the market consolidates constructively and pushes into higher highs. Higher number of quality stocks breaking out of early stage bases would increase our conviction that a new sustainable trend higher is developing.

Key News

Whirlpool Of India (+2.2%) Q2 FY20 results beat consensus. PAT increased 63.8% y/y to Rs 128.7 crore. Revenue increased 17.9% y/y to Rs 1,393.5 crore. Margin expanded 110bps y/y to 10.2%. EBITDA was up 31.5% y/y to Rs 141.7 crore. The stock rebounded from its 21-DMA after the results.

Vip Industries (+0.1%) Q2 FY20 revenue grew 2.6% y/y. PAT at Rs 32.9 crore was flat y/y. EBITDA grew 29.7% y/y to Rs 66.2 crore, as margin expanded 340bps y/y to 16.1%.

City Union Bank (+3%) reported Q2 FY20 results. PAT beat consensus, NII missed. GNPA increased 5.5% y/y to Rs 1,135 crore, while NNPA was up 4% y/y to Rs 600 crore.

Ipca Laboratories (+5.2%) reported Q2 FY20 results. PAT was up 63.3% y/y to 193.5 crore. Revenue grew 26.9% y/y to 1,284 crore. EBITDA was up 52.5% as the margin improved 350bps y/y to 20.7%.

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

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