Today’s Action:
Strong gain in Nifty leads to change in market outlook.
Daily Market Review:
Market bulls made a strong comeback today, as both the Sensex and the Nifty gained about 2%.
On the back of positive global cues, the Indian market observed a gap-up opening and remained strong throughout the session.
The raging of bull started in the accordance of U.S. payroll number for February which stunned the market on Friday, as the economy reported a gain of 313,000 jobs, about 52% more than expected. Also, a lower-than-expected wage growth improved the overall sentiment, as worries of faster rate hikes by the Fed eased.
Broader indices had a roller coaster ride as volatility continued to loom over it. The Nifty Midcap and Smallcap trimmed their morning gains and slipped in red but managed to recover from the day’s low to post a gain of 1% and 0.8%,respectively.
On the sector front, all the indices ended in green barring Nifty PSU bank (-0.47%). Among the indices, Nifty FMCG (+2.6%), Metal (+2.1%), and Private Bank (+1.9%) were the top performers.
Leading stocks had a decent day, as MarketSmith India IND 47, our proprietary list of top 47 stocks with strong technical and fundamental characteristics, advanced 0.4%.
However, gain in the overall market was not widespread, as only six stocks rose for every five stocks that fell on the NSE.
On the macro front, the Indian Government is likely to announce the Consumer Price Index (CPI) data for February 2018 after market hours today. CPI data for January 2018 grew by 5.07% in comparison with 5.21% in December 2017.
Industrial production data for January 2018 will also be released after market hours today. The factory output for the month of December 2017 came in at 7.1%, compared with 8.4% in November 2017.
Talking about market direction, today’s market action has led to a change in the market outlook to Rally Attempt, as the key indices managed to stay above March 7 lows for the third straight session. However, we suggest investors to remain cautious until you see a follow-through day (FTD) or at least strong price action in the leading stocks. Remember, no market uptrend has started without giving a signal in the form of a FTD.
Current Outlook:
– Keep a watch list of growth stocks ready
– Wait for the market to follow through or strong price action in leading stocks before acquiring new positions
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