Today’s Action
Market snubs Friday’s rally. Nifty, -0.2%; Sensex, -0.2%; Model Portfolio, +0.4%; MSI Ind 47, -0.7%.
Daily Market Review
India’s benchmark indices were under pressure through the trading session and before a partial recovery in the last hour. Except Nifty IT and Nifty Bank, all sectoral indices ended in the red, Nifty Metal ended flat. Nifty Bank ended marginally positive supported by better-than-expected quarterly results by Axis Bank and State Bank Of India. Nifty Pharma was the worst performer, which declined 0.9% led by results below expectations from Cipla. Glaxosmithkline Pharms. was the other top pharma loser.
In line with frontline indices, the Nifty Midcap and Nifty Smallcap each fell 0.4%.
On Friday, we changed the market status from a Rally Attempt to a Confirmed Uptrend after strong gains were delivered by Nifty (>1.5%) with stronger than Thursday’s volume, resulting in a follow-through day. More follow-through days further this week will strengthen the current uptrend, where as repeated down days with high volume may shift the market to an Uptrend Under Pressure. Although a Confirmed Uptrend is a green signal to enter the market, it is important that investors don’t play all their cards at once. We would suggest adopting an investment approach where you begin with a small allocation and increase it as and when we advance further, with consideration to market direction.
The advance-decline ratio was slightly in against winners. Of the 2,075 stocks traded on the NSE, 865 gained, 892 declined, and 318 remained unchanged.
Stocks in News
Cipla reported its Q2 FY 2019 results today. Net profit missed estimates and was 11% lower y/y. The stock was down more than 7% down intraday and closed 7.3% down.
Axis Bank reported its Q2 FY 2019 results on Friday after market hours. Bank’s net profit surged 83% y/y because of lower provisioning. Bank reported improvement in asset quality with reduction in GNPA ratio for the third straight quarter and reduction in slippages. The stock rose more than 2% intraday before closing 2.3% up.
State Bank Of India reported its quarterly results just before market close. NII increased 7%, profit declined 41% against street expectations of net loss. Improved asset quality and declining GNPA ratio (from 10.69% to 9.95% q/q) were positive surprise. The stock ended 3.4% up.
Action in Leading Stocks
Leaders Up on Volume: Niit Technologies (+0.9%), Gail (India) (+0.6%)
Leaders Down on Volume: Andhra Petrochemicals (-18.4%), Avenue Supermarts (-1.8%), Aditya Fash.& Retail (-0.3%)
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