Daily Big Picture : Nifty Moved to an Uptrend Under Pressure; Nifty Auto Hit 52-week Low

Today’s Action

Nifty, -2.1%; Sensex, -2.0%; Model Portfolio, -2.2%; Nifty Midcap, -2.7%; Smallcap, -2.4%

Daily Market Review

Market Status: Uptrend Under Pressure 

After a gap down opening, benchmark indices succumbed to selling pressure with Nifty falling 252 points, the worst single-day fall in 2019. Nifty breached its 50-DMA, albeit on lower volume. The proposals prescribed in the union budget such as surcharge on high net worth individuals and increasing threshold of public shareholding to 35% from 25% earlier has dampened investor sentiment. In the broader market, Nifty Midcap and Smallcap fell 2.7% and 2.4%, respectively.

On the sectoral front, all the sectors closed in the red. Nifty PSU bank (-5.9%) declined the most followed by Nifty Realty (-3.5%), Auto (-3.3%), Media (-3.3%), and Financial Service (-2.9%). The advance-decline ratio was skewed toward decliners. Of the total 2,093 stocks traded on the NSE, 387 advanced, 1,382 declined, and the rest ended flat.

Today, we changed the market status to an Uptrend Under Pressure from a Confirmed Uptrend, driven by factors such as Nifty breaching its 50-DMA, accumulation of distribution days, and stalling days. In June, out of 19 trading sessions, the advance-decline ratio was skewed toward decliners for 16 sessions, indicating a narrow market breadth. From here, if 2-3 more distribution days are added, we will change the status to a Downtrend. The status will be back to a Confirmed Uptrend if Nifty retakes 12,104 (high during the recent rally). We would like to see Nifty holding its 100-DMA (11,500 level), which gave good support when market corrected in May. On further downside, Nifty can find support near its 200-DMA, which is ~4% below the current level.

Key News

Yes Bank rallied 5.7% today after its management clarified that the bank’s financial position was sound and stable and its liquidity and operating performance continued to be robust.  The bank also announced the appointment of Rajeev Uberoi as senior group president, governance and controls, and Anurag Adlakha as senior group president and head, financial management and strategy.

Punjab National Bank fell 11% today after it disclosed fraud amounting to Rs 3805 crore in Bhushan Power & Steel account. This is the second case after NIrav Modi defrauded of over Rs 14,000 crcore last year.

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

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