Today’s Action:
The benchmark indices made all-time highs as investors resorted to accumulate PSU banks after the government announced its plan to infuse INR 2.11 lakh crore in the PSU banks to address their problem of weak capitalization.
Daily Market Review:
The news about bank recapitalization by the government led the PSU banks to rally. The key indices touched a fresh high today, predominantly due to gains posted by the Nifty PSU Banks.
The Nifty started the day at 10,321.15 and made an intraday all-time high of 10,340.55. After falling down to 10,240.90, it ended the day at 10,295.35 with the gains of 0.86%. The BSE Sensex also made an intraday all-time high at 33,117.33. It opened today at 32,995.28 and went down till 32,804.60 before gaining 1.33% for the day to close at 33,042.50.
The market breadth, indicating the overall health of the market was in favor of losers today. On the NSE, 619 stocks advanced, compared with 902 stocks declining, and 60 stocks remaining unchanged.
The Nifty Midcap and the Smallcap index also rejoiced today as they advanced 1.61% and 1.58%, respectively.
The MarketSmith IND 47 Index, which lists the top 47 stocks in chart and fundamental characteristics, lost 1.58% today.
In the sectoral chart, apart from the Nifty Pharma, which lost 1.51%, all sectors posted gains today. Nifty PSU bank stole the limelight with sensational gains of 29.63% today. The other two top performers were Nifty Bank and Financial Services, with gains of 3.36% and 1.67%, respectively.
Both the Sensex and the Nifty observed a very high trading volume compared with yesterday’s trading session. The distribution day count remains at 4 for both the indices. The market status remains in a Confirmed Uptrend.
Reliance Communication is expected to shut down its 2G mobile business in about a month and focus on the 3G and 4G network until they remain profitable.
The recapitalization program announced by the government for the PSU banks is aimed at significantly reducing the drag on bank credit growth and is also expected to boost investment and GDP growth. Investors cheered this move by the government as most of the PSU banks gained heavily today.
In stock talk, Kotak Mahindra Bank announced Q2 FY 2018 earnings, where the Company posted 22% growth in profit.
Reliance Nippon Life AMC IPO was fully subscribed within a minute of opening. This shows a strong demand for the stock and a good opening is on cards.
Current Outlook:
– Market environment conducive for new purchases, but remain selective.
– Focus on fundamentally strong stocks breaking out of strong technical patterns.
– Stay disciplined and exercise sound buy and sell rules.
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