Daily Big Picture : Nifty Rebounds Sharply; Metal, Auto Stocks Lead Gains

Today’s Action

Nifty, 1.2%; Sensex, 1%; Nifty Midcap, 0.8%; Nifty Smallcap, 0.6%; and Model Portfolio, 0.9%.

Daily Market Review

Market Status: Confirmed Uptrend

Today, the market rebounded after a brief shake-out in yesterday’s session. Though there was volatility intraday due to active price changes in banking stocks, Nifty was able to defend its gap-up opening level. Mid- and smallcap indices also had a positive session, but underperformed the largecaps as ~40% of the stocks in mid- and smallcap indices closed in the red.

All the sectoral indices made progress back toward the Monday’s close, mostly nullifying the losses in the previous two sessions. Barring Nifty IT, all other sectoral indices closed in the green. Nifty Metal was up 4% as MOIL, Vedanta, NALCO, NMDC, and Coal India gained 5–7%. Nifty Auto, Media, and Realty advanced 2–3%.

Underlying price action continues to improve across the sectors. Given the follow-through day during last week, we maintain a positive view on the general market but strongly advise a disciplined approach. Focus on high relative strength quality ideas coming out of earlier-stage bases or reclaiming key moving averages on high volume. We would hesitate to commit capital to stocks that have poor fundamental profile. We would like to see an additional follow-through day to be more confident about the current rally.

The advance-decline ratio was leaned toward advancers. Of the 2,127 stocks traded on the NSE, 977 advanced, 782 declined, and the rest remained unchanged.

Key News

Astrazeneca Pharma India: The company received import and market permission from the Drugs Controller General of India for fixed-dose combination of Dapagliflozin 10mg plus Saxagliptin 5mg film coated tablets. The drug will be useful for type 2 diabetes. The stock was up ~4% and broke out from a double-bottom base on above-average volume.

Sadbhav Infr.Projects: AJTL, a wholly owned subsidiary of the Company, received an extension in the concession period from the Government of Maharashtra. Original concession period of ~23 years has been extended to ~31 years, which will now end in April 2038. The stock was down ~10%, trading below all the key moving averages.

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

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