Today’s Action:
Key indices extend losing streak to five sessions; smallcap and midcap benchmarks outperform.
Daily Market Review:
Benchmark indices continued to post losses however late hour trade helped in some recovery. Broader indices outperformed the frontline indices, with the Nifty Smallcap index closing in green for the first time in eight sessions.Announcement of LTCG on equity investments, slippage in fiscal and revenue deficit and the global correction led by a fall in the U.S. market has created a panic among the investors as they resorted to profit booking. The Nifty lost 0.87% while the Sensex gave away 0.88% in today’s trading session.
The divergence in the broader indices was witnessed once again. The Nifty Midcap started the day 400 points lower than the previous close, however as the day progressed some intermittent buying helped in keeping the total loss to 0.20% for the day. The Nifty Smallcap had a relatively strong trading session today. After gapping down by 223 points , it ended the day with an impressive gain of 0.76%.
Talking about sector performance, the day belonged to four sectors which helped the market in some recovery. The top three gainers were Nifty Auto (0.75%), PSU Bank (0.57%) and Pharma (0.30%).
The market breadth remained in favour of losers once again. On NSE, 570 shares advanced against a decline in 959 shares. A total of 30 shares remain unchanged.
On the contrary, the IND 47 index, which is a list of top 47 stocks in chart and fundamental characteristics, gained 0.15% today, thus outperforming the major indices.
From the earnings corner, Tata Motors reported Q3 FY 2018 numbers today. Its net profit missed the consensus estimates due to weak sales of Jaguar Land Rover. The consolidated revenue grew 16%, y/y to INR 74,516 crore, backed by strong commercial vehicle sales growth.
Colgate Palmolive has reported an above-estimate profit growth of 34%, y/y with volume growth at 12%, y/y. The net profit margin expanded 280 basis points to 27.3% beating the consensus estimates.
The monthly data for automobile sales volume for the first month of 2018 showed a strong performance in the growth of commercial vehicles and tractors. With the government’s continuous push to increase farmers income, it augurs well for the commercial vehicle and tractor segment. Companies like Escorts, Mahindra & Mahindra, Ashok Leyland and Eicher Motors could benefit from this. Apart from CVs, the two wheeler segment also displayed a commendable growth during the month.
Today the BSE Sensex attracted one distribution day due to higher trading volume compared to the previous session. The total distribution day count stands at two on the Nifty and three on the Sensex. Both the indices are trading about 4.5% below their all-time highs. While the Indian market status remains unchanged at Confirmed Uptrend, the recent correction in midcap and smallcap indices should not be ignored.
Current Outlook:
– Market showing divergence; key indices in uptrend while midcap and smallcap indices in downtrend.
– Stay disciplined and exercise sound sell rules.
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