Today’s Action:
Market scales to new highs.
Daily Market Review:
Indian market started the week with a great show, after the IIP (Index of Industrial Production) data released late on Friday amused the investors. The IIP data for November was announced at 8.4%, thus beating the street estimates. The morning zeal, however, faded as both the indices trimmed their early gains after touching all-time highs. The market seems to be volatile before the budget and due to the ongoing earnings season; it is more of a traders market off late.
The Nifty posted a gain of 0.56%, while the Sensex advanced 0.73% today. The Nifty closed at 10,741.55 today, after making an all-time high of 10,782.65. The Sensex made an all-time high of 34,963.69 before closing at 34,843.51.
We have frontline indices making all-time high, whereas we have broader indices that have failed to sustain their gains. The Nifty Midcap and Small cap indices posted a modest gains of 0.01% and 0.22% today respectively. This reflects that the investors are willing to take less risk and are looking to invest in highly liquid stocks. The way in which these broader indices are behaving raises a subtle question that will they repeat their 2017 performance, the answer to this question is given by the distribution day count which still confirms that these indices are in Confirmed Uptrend and investors should sit tight with their position by following strict sell rules.
Sectoral chart gave a mixed view today, as the top-performing sectors were Nifty Financial Service (2.41%), Media (1.41%), and Private bank (1.33%),whereas the sectors on the losing side were Nifty Auto (-0.96%), IT (-0.88%), and Pharma (-0.84%).
India’s wholesale inflation data lowered to 3.58% in December, after hitting an eight-month high of 3.93% in November, which is a positive sign for the economy.
The merger of Capital first and IDFC Bank was the highlight today, which pushed the stock toward their all-time high, while the stock surged almost 7% intraday as shares of IDFC Bank were trading 2% lower during the market hours.
HDFC gained about 2% intraday, after its board approved the fund-raising plan by an issuance of 3.34 crore shares at INR 1,726.05 per share to investors, including the top-global private equity player.
The market breadth, which indicates the overall health of the market continues to be in favor of losers. Today on the NSE, 775 stocks advanced and 778 stocks declined. A total of 45 stocks remain unchanged.
Our proprietary list MarketSmith India IND 47 outperformed the Nifty, while it gained 1.49% today.
Today both the Sensex and the Nifty dropped one distribution, as the index closed at 5% more than the distribution day level, thus the count for the Sensex and the Nifty remains at zero and two, respectively.The Indian market remains in a Confirmed Uptrend.
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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