Daily Big Picture – Market Brings Home Decent Gains

MarketSmith India_William Oneil IndiaToday’s Action:

Benchmark indices opened higher in today’s session and held onto their gains. Broader markets outperformed the headline indices.

Daily Market Review

The Indian market had a constructive session in today’s trade. The key indices opened in green and held onto their gains through the day. The optimism witnessed in today’s trading session can be attributed to the uptick in the Infosys stock, as the scrip opened higher by 3% on account of Nandan Nilekani’s return to the Company and a buy recommendation from CLSA.

Today, the Nifty opened higher at 9,907.15. After hitting the day’s low of 9,882.00, the Nifty held onto its gains and reached an intraday high of 9,925.75. The index finally closed for the day at 9,912.80, up 0.57% from last week’s close. Similarly, the BSE Sensex opened higher at 31,756.87. The index traded in the range of 31,701.67-31,809.70, before closing for the day at 31,750.82, up 0.49% from last Thursday’s close.

The market breadth, indicating the overall health of the market, was tilted towards the gainers in today’s session. On the NSE, 997 stocks advanced, compared with 457 stocks declining, and 62 stocks remaining unchanged.

The broader markets outperformed the headline indices as the Nifty Midcap and Smallcap indices notched up gains of 1.09% and 1.40%, respectively, in today’s session.

Today, the MarketSmith India IND 47 Index, which lists the top 47 stocks in chart on fundamental characteristics, gained 1.32%.

On the sectoral front, barring the Nifty PSU Bank index which slipped 0.10%, all the other sectors ended in green. The Nifty Media, IT, and Pharma indices led the market today, with gains of 0.86%, 0.84%, and 0.82%, respectively.

Shares of Infosys surged 4% intraday as CLSA upgraded the stock to buy from underperform, and raised the target price to INR 1,070 from INR 940 after co-founder Nandan Nilekani re-joined the Company as non-executive chairman. According to reports, the Company is considering several former executives for the post of CEO, which include the likes of B G Srinivas, Ashok Vemuri, and T V Mohandas Pai. Among company insiders, Mohit Joshi, Ravi Kumar, and Pravin Rao are also in the fray for the top job.

Telecom stocks were in focus today due to rumours that the Telecom Regulatory Authority of India (TRAI) is looking to phase out interconnect usage charge (IUC). The industry has been hoping that the IUC may be raised to between 30 and 35 paise per minute. Any reduction from the current 14 paise, which is already below cost for the legacy networks, will have a significant impact on the bottom-line of Bharti Airtel, Idea Cellular, and other incumbent players.

The insurance regulator IRDA’s board is likely to meet today to discuss the IPOs filed by general and life insurance companies. It will discuss the IPO proposals of HDFC Life, SBI Life, New India Assurance, and ICICI Lombard. It will further decide the requirements of companies before granting nod for IPO. The regulator will also consider Reliance Capital’s proposal of a separate health insurance arm, and is likely to grant R1/first level nod to the health insurance arm.

Today, the Nifty witnessed lower trading volume, in comparison with Thursday’s session; while the Sensex observed higher volume. The distribution day count for the Sensex and the Nifty stand at 7.0 and 5.0, respectively. The Indian market is currently in Uptrend Under Pressure.

Current Outlook:

– Be cautious with any new purchases.

– Make a defensive game plan for your portfolio.

– Stay disciplined and exercise sound sell rules.

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