Daily Big Picture : Nifty Rebounds Sharply; Retakes 200-DMA

Today’s Action

Nifty, +1.7%; Sensex, +1.7%; Nifty Midcap, +1.3%; Nifty Smallcap, +0.9%; and Model Portfolio, +1.3%.

Daily Market Review

Market Status: Confirmed Uptrend

Markets reversed and put an end to the downward movement of the last six trading days. After finding support near 50-DMA, Nifty had a rebound from there. It formed a higher high in the hourly chart and retook its 21- and 200-DMA to close near the day’s high with solid gains. Today’s session will be considered as an additional follow-through day, as Nifty gained more than 1.5% with volume higher than the previous session. In the broader market, both Midcap and Smallcap closed with decent gains of 1.3% and 0.9%, respectively.

On the sectoral front, barring Nifty IT (-0.8%), all other sectoral indices closed in the green. Nifty bank and Nifty Finservice rallied more than 3% today. The advance-decline ratio was skewed towards advancers. Of the 2,131 stocks traded on the NSE, 964 advanced, 821 declined, and the rest remained unchanged.

Going forward, we would like Nifty to keep the momentum and hold above its 200-DMA and retake 100-DMA. Further, we would like to see decent advancement in market breadth which would signal increasing strength in the market. On the flip side, if Nifty registers additional distribution days, it will be a subtle sign of weakness in the market.

Key News

State Bank Of India announced a reduction in its marginal cost of fund based lending (MCLR) rate by 10bps across all tenors with effect from October 10. The stock was up 4.8%.

Lupin received GMP (Good Manufacturing Practice) Certificate from the Pharmaceutical and Medical Devices Agency (PMDA), Japan for its Mandideep API facility (Unit II). The stock was up 2.2%.

Jbm Auto Limited received orders for the supply of 300 buses from multiple parties. The company is planning to execute them before the end of the current fiscal year. The parties which have placed the orders are Delhi Integrated Multi-Modal Transit System Limited (DIMTS), Spicejet Limited & InterGlobe Aviation Ltd. (Indigo Airlines), and Navi Mumbai Municipal Transport Corporation. The stock rose 19.4%.

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