Daily Big Picture : IT and Pharma Stocks Lead Rally; WPI Falls to 23-Month Low

Today’s Action

Nifty, +0.3%; Sensex, +0.4%; Model Portfolio, -0.6%; Nifty Midcap, -0.8%; Smallcap, -0.7%

Daily Market Review

Market Status: Uptrend Under Pressure 

The Nifty, after hitting the day’s low in the early morning session and testing 100-DMA (11,530.44), bounced back strongly in the afternoon session led by gains in IT and Pharma stocks. However, it failed to hold above 11,600. Infosys (+7.2%) led the gain followed by Sun Pharm.Industries (+3.7) and Upl (+2.8%).

On the macro front, India’s wholesale price inflation fell for the second consecutive month in June at 2.02% (23-month low) compared with 2.45% in May and 5.68% in June 2018. This is due to a decline in prices of vegetables as well as fuel and power items. CPI, released on Friday, rose to an eight-month high of 3.18% in June compared with 3.05% in May.

On the sectoral front, barring Nifty IT (+2.9%), Pharma (+1.1%), and Auto (+0.3%), all other sectors closed in the red. Nifty PSU Bank (-2.6%) emerged as the top loser followed by Nifty FMCG (-0.6%) and Media (-0.5%). The advance-decline ratio leaned towards the losers. Of the total 2,103 stocks traded on the NSE, 590 advanced, 1187 declined, and the rest ended flat.

On July 8, we changed the market status to an Uptrend Under Pressure from a Confirmed Uptrend, driven by factors such as the Nifty breaching its 50-DMA, accumulation of distribution days, and stalling days. The distribution day count now stands at two on the Nifty, with one day expiring today. 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 (its high during the recent rally).

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