Daily Big Picture : Nifty Escapes Distribution Day; RBI Maintains Status Quo

Today’s Action

Nifty, -0.2%; Sensex, -0.2%; Nifty Midcap, -0.2%; Nifty Smallcap, +0.1%; Model Portfolio, +0.1%.

Daily Market Review

Market Status: Confirmed Uptrend

Nifty ended the volatile session on a negative note after RBI keeps the repo rate unchanged at 5.15%. The MPC also lowered the GDP growth for FY20 at 5% compared with earlier estimates of 6.1%. As volumes came in lower than the previous day, Nifty escaped a distribution day. The broader market saw a mixed reaction as Nifty Midcap fell 0.2% while Smallcap closed 0.1% higher. Moreover, the RBI increased the lending cap for peer-to-peer five-fold to Rs 50 lakh compared with Rs 10 lakh at present.

On the sectoral front, Nifty Metal (-2.3%) was the top decliner led by Jsw Steel (-3.2%) followed by Nifty PSU Bank (-1.8%) and Pharma (-0.9%). On the flip side, Nifty Media (+3.0%) was the top gainer led by Zee Entertainment Ents. (+6.7%).

Though maintaining a positive view on the general market, we are taking a note of higher number of distribution days. Nifty is less than a percent above its 21-DMA. If the 21-DMA is breached and the distribution day count remains elevated, we may downgrade the market to an Uptrend Under Pressure. If the rally sustains, look for stocks that had pulled back in price on low volume. If those stocks rebound from their moving averages when the market starts making higher highs, then they can do well.

Key News

Force Motors: reported healthy sales for November. The company sold 2,112 units in November, up 41.8% y/y with domestic sales growing at 31% y/y to 1,936 units. The stock was up 1.2%.

Yes Bank: Moody’s cut Yes Bank’s long-term foreign currency issuer rating to B2 and assigns a negative outlook. The stock closed 1.4% lower.

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

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