Daily Big Picture : Nifty Sustains Gains After Gap-up Opening; Banks and Financial Service Stocks Lead, IT and Pharma Lag

Today’s Action

Nifty, 2.9%; Sensex, 2.8%; Nifty Midcap, 3.3%; Nifty Smallcap, 2.5%; and Model Portfolio, 3%.

Daily Market Review

Market Status: Confirmed Uptrend

Nifty extended gains for the second consecutive day after a gap-up opening. On Friday, the Indian market was upgraded to a Confirmed Uptrend. The upside reversal was triggered by a corporate tax rate cut announcement. But sectors like IT and Pharma that were already paying lower taxes are out of favor. Nifty is now trading 4.4% above its 50-DMA.

On sectoral front, Nifty Bank (+5.4%), Financial Services (5.4%), and FMCG (4.4%) were the top gainers. On the flip side, Nifty IT (2.8%) and Pharma (2.2%) closed in the red. The advance-decline ratio was skewed toward advancers. Of the 2,119 stocks traded on the NSE, 1,197 advanced, 622 declined, and the rest remained unchanged.

Looking forward, we would like the quality growth names breaking out of the base on above-average volume. Look for the industries whose group rank is improving. For stocks, check Relative Strength line. An upward trending line is a positive sign. Also, do not hesitate to commit new capital to stock that is at 52-week/all-time high. Buy high and sell higher.

Key News

Cadila Healthcare: The company has received an Establishment Inspection Report from the US FDA for its manufacturing facility at Ankleshwar in Gujarat. The regulatory board conducted inspection at the facility from July 22–26. The stock was up 0.1% today.

State Bank Of India: The bank relaunched its repo-linked home, auto, and MSME loans, effective from October 1. The stock was up 4.0% today.

Icici Bank: The bank announced that it will expand its retail network by opening 450 new branches in FY20. Out of the total planned expansion, 320 branches are already in operation and the rest will be ready by the end of FY20.

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

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