Daily Big Picture : Realty and Auto Stocks Rally; Midcap and Smallcap Stocks Outperform

Today’s Action

Nifty, +0.3%; Sensex, +0.3%; Nifty Midcap, +0.9%; Nifty Smallcap, +1.5%; and Model Portfolio, -0.1%.

 Daily Market Review

Market Status: Rally Attempt

The benchmark indices, after opening higher, traded in a narrow range to end near their day’s opening. The Nifty and Sensex were up 0.3% each. In the broader market, Nifty Midcap and Smallcap gained 0.9% and 1.5%, respectively, continuing to outperform. Currently, Nifty is trading ~2% below its 50-and 200-DMA. From August, the 200-DMA is acting as a strong resistance; reclaiming the 200-DMA will be a constructive set-up.

There was mixed reaction on the sectoral front. Nifty Realty (+4.1%), Auto (+3.6%),  and PSU Bank (+3.1%) were the top gainers. On the flipside, Nifty IT (-1.4%) and FMCG (-0.3%) were the top losers. The Auto stocks advanced higher as the Finance Minister hinted at more steps towards reviving demand in the sector.

The advance-decline ratio was skewed towards advancers. Of the 2,125 stocks traded on the NSE, 1,337 advanced, 472 declined, and the rest remained unchanged.

Looking forward, we would like to see an improvement in market breadth and Nifty trading above its 21-DMA. If a follow-through day occurs, we will shift the market to a Confirmed Uptrend. On the flip side, if Nifty breaches its correction low of 10,637, we will change the market status to a Downtrend.

Key News

Tata Motors shares gained over 10% as its retail sales in China continued to strengthen (up 17.4% y/y). However, its global wholesale sales declined 32% y/y to 72,464 units in August.

Bharat Heavy Electricals Ltd has successfully commissioned the 1320 MW IB thermal power station located in Odisha. The stock was up 1.1% today.

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

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