Today’s Action:
Frontline indices trim gains; close in lower half of day’s range.
Daily Market Review:
Major indices extended their winning streak to three sessions, with both the Nifty and the Sensex settling 0.1% higher in a range-bound session.
Pharma stocks displayed strength once again, as Dr Reddy’s Laboratories, Cipla and Lupin led today’s move on the Nifty.
Broader market indices had to settle for losses, with the Nifty Midcap and Smallcap indices retreating 0.4% and 0.2%, respectively.
The overall market breadth tilted in favour of losers today. Out of 2,061 stocks traded on the NSE, 843 advanced, 881 declined and 337 remained unchanged.
On the sectoral front, Nifty PSU Bank (+1.5%) and IT (+1.3%) were the top gainers while Media (-0.8%) and FMCG (-0.5%) ended lower. Nifty Pharma (+0.9%) continued its good run, advancing for the sixth straight session.
Our proprietary list of leading stocks, the MarketSmith India IND 47 index lost 0.1%, faring better than midcap and smallcap benchmarks.
Stock market participants will be closely eyeing the outcome of the Federal Reserve meet later tonight.
Despite a strong start in today’s session, the Nifty gave away most of its gains as it faced selling pressure in the final hour of the session. The index is facing strong resistance at its previous high of 10,929. The market condition remains unchanged at an Uptrend Under Pressure.
While both key indices are only 2-3% away from their all-time highs, we would like to wait for further confirmation. The distribution day count stands at two on the Nifty and three on the Sensex. On the downside, the 10,550 serves as a crucial support level for the Nifty.
The broader market indices seem to have bottomed out, but we would like to wait for a follow-through day for confirmation. Both Nifty Midcap and Smallcap are currently in a Rally Attempt. The midcap and smallcap benchmarks have high overhead resistance and are trading 13% and 20% below their January highs.
Current Outlook:
– Be cautious with new purchases.
– Form a defensive game plan for your portfolio.
– Stay disciplined and exercise sound sell rules.
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