Daily Big Picture – Nifty Creates History, Ends Above 10K for the First Time; Sensex Extends Highs

MarketSmith India_William Oneil IndiaToday’s Action:

Benchmark indices extended their highs, as the Nifty achieves a historic feat. Broader markets follow the suite.

Daily Market Review

The Nifty reclaimed the 10K mount in today’s trading session, and closed above this historic mark for the first time. Similarly, its peer composite, the Sensex, continued its uptrend to record a fresh all-time high, yet again.

The Nifty ticked off the day at 9,983.35. After hitting an intraday low of 9,966.80, the benchmark index trended higher to record a new all-time high of 10,025.25. It clinged on to the 10K mark, and closed 0.56% higher from yesterday at 10,020.65. The Sensex opened at 32,247.36 points and gained 0.48% in today’s trading session. After trading in the range of 32,232.88- 32,399.58 it finally settled at 32,382.46, a new closing high.

The market breadth, indicating the overall health of the market, was fairly balanced between winning and losing stocks. On the NSE, 835 stocks advanced, compared with 821 stocks declining, and 307 stocks remaining unchanged.

The MarketSmith India IND 47 Index, which lists the top 47 stocks in chart on fundamental characteristics, gained 0.44% today.

The broader indices moved in tune with the frontline composites, in today’s session. By the end of the trading session, the Nifty Midcap and the Smallcap indices added 0.28% and 0.48%, respectively, to yesterday’s closing levels.

On the sectoral front, the top gainers were Nifty Metal, Pharma, and Pvt Bank indices gaining 1.73%, 1.07%, and 0.84%, respectively, while the Nifty Media, PSU Bank, and IT were the only losers with decrements of 0.64%, 0.47%, and 0.25% respectively in today’s trading session.

In banking sector news, due to the stress in the iron and steel, power, infrastructure, and telecommunications sectors in the economy, private sector banks like HDFC Bank and Axis Bank have made additional provisions towards standard assets in these sectors. While HDFC Bank has set aside INR 206.3 crore towards the telecom, and iron and steel sectors, Axis Bank has made 1% additional provision of INR 184 crore towards standard assets in the four sectors mentioned above. This higher provisioning will lead to more capital outgo hurting the banks’ profitability for the upcoming three quarters.

With sugarcane being sown in an area of 49.2 lakh hectares till the last week of 2017-18 crop year (July-June), compared with 45.2 lakh hectares in the year-ago period, the government has asked the sugar companies to start their mills from the beginning of October this year. Normally, sugar companies commence their mills between Dussehra and Diwali, in the second half of October.

Mortgage lender Housing Development Finance Corporation (HDFC) reported a 17% y/y fall in standalone net profit to INR 1,556 crore for the quarter ending June 2018. While the Company’s standalone income from operations grew 9% y/y, to INR 8,129 crore, its gross NPA increased to 1.12% against 0.79% in the previous quarter. Shares of Bharti Airtel fell over 1% in today’s trade after the Company reported its lowest profit in 18 quarters, as the price war triggered by Reliance Jio has led to a massive 75% fall in its earnings.

Today, the Nifty observed a higher trading volume while the Sensex witnessed a lower trading volume compared with yesterday’s trading session. The Nifty’s distribution day count has reduced from 2.0 to 1.0, as one distribution day has been reversed due to recovery in the index. For the Sensex, the distribution day count stands at 2.0, and the Indian market remains in a Confirmed Uptrend.

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.

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