Daily Big Picture – Sell-Off in Broader Indices Intensifies

Today’s Action:

Weak global cues keep D-Street bulls on sidelines.

Daily Market Review:

Mirroring weakness in global markets, India’s key indices succumbed to selling pressure in today’s session. The Nifty lost 0.73% while the Sensex shedded 0.69% today due to lack of buying interest.

While both the Nifty and the Sensex had scaled fresh highs in yesterday’s session, today was a different day altogether. Investors resorted to a defensive game plan ahead of the Federal Reserve two-day meet (30-31 January, 2018) and the fiscal budget.

With the coming budget being the last one before the 2019 general elections and the forthcoming state elections, it would be interesting to see how the government approaches it. Business enterprises are keenly interested as there is a buzz that the corporate tax may be tweaked in their favor.

Coming back to today’s action, broader indices remained under pressure for the fourth straight session. Investors continued to take the profit booking route amid high valuation concerns in broader indices. Stocks from the midcap and small cap space had given stellar returns in 2017. However, they seem to have hit a rough patch in the last few weeks.

In the end, Nifty Midcap and Smallcap composites dropped 0.8% and 1.7%, respectively.

Moreover, the market breadth was in favour of losers today. On NSE, 331 shares advanced against a decline in 1189 shares. A total of 27 shares remain unchanged.

Due to lower trading volume, both the Sensex and the Nifty escaped the brunt of distribution day today. As a result, the distribution count remains unchanged at one for both the indices. For now, the Indian market continues to be in a Confirmed Uptrend.

Sectoral indices depicted a gruelling picture today as selling was witnessed across the board. Nifty Private Bank, Financial Services and Realty indices were the top losers with declines of 1.12%, 1.09% and 1.08%, respectively.

The MarketSmith India 47 index, which is a list of top 47 stocks in chart and fundamental characteristics, declined 2.43% today mainly on account of weakness in the overall market.

From the earnings corner, Indian Oil gained 5% intraday after the Q3 FY 2018 results beat street expectations and the Company announced a bonus issue in the ratio of 1:1.

TVS Motors reported stellar Q3 numbers today. The Company’s revenues grew 23.5%, y/y to INR 3,685 crore, driven by 15% volume growth, while its net profit grew 16%, y/y to INR 154 crore.

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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