Daily Big Picture – Global Market Weakness and SEBI Action Drag Indian Market

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Today’s Action:

Benchmark indices extended their losses from yesterday, due to global geopolitical tensions and uncertainty following SEBI’s action against alleged shell companies. Broader markets underperformed the headline indices.

Daily Market Review

The benchmark indices had a week session, with the key indices trading in red throughout the day. The key indices opened in red, as the Asian markets and the U.S. stock futures were subdued after an escalation in tensions on the Korean peninsula. North Korea has warned that it is “carefully examining” plans for a missile strike on the U.S. Pacific territory of Guam.

Back home, the SEBI’s move to place trading curbs on 331 scrips further dampened market sentiment, which resulted in the market weakness from yesterday, spilling into today’s session. Of the 331 stocks identified by the market regulator, 169 had been already suspended from trading for various violations.

Today, the Nifty opened lower at 9,961.15 and topped out at 9,969.80. The index started losing ground in the morning and reached an intraday low of 9,893.05, before finally settling at 9,908.05, down 0.71% from yesterday’s closing price. Similarly, the BSE Sensex, after opening lower at 31,926.14, hit an intraday high of 31,967.28. The index sold off as the day progressed, reaching an intraday low of 31,731.91, and closed for the day at 31,797.84, down 216.35 points or 0.68% from yesterday’s close.

The market breadth, indicating the overall health of the market, was tilted towards the losers in today’s session. On the NSE, only 250 stocks advanced, compared with 1,231 stocks declining, and 35 stocks remaining unchanged.

The broader markets underperformed the headline indices as the Nifty Midcap and Smallcap indices lost 1.67% and 1.78%, respectively, in today’s session.

Today, the MarketSmith India IND 47 Index, which lists the top 47 stocks in chart on fundamental characteristics, lost 1.99%.

On the sectoral front, all sectors ended in red. The Nifty Pharma, Auto, and Media indices bore the maximum brunt of the market weakness, with declines of 3.94%, 1.73%, and 1.09%, respectively.

In a move that is set to intensify the competition in the credit cards segment, the country’s largest private sector lender, ICICI Bank, has launched instant digital credit cards for savings account customers. The credit limit for the facility has been set at INR 4 lakh based on pre-checked credit bureau scores. As of June, ICICI Bank’s number of outstanding credit cards stood at 43.46 lakh, below HDFC Bank and State Bank of India.

Yesterday, Axis Bank reduced the interest rate on savings accounts by 50 basis points to 3.5% for balances up to INR 50 lakh. The Bank will continue to pay 4% interest on deposits of above INR 50 lakh. The new rates will be effective from today. Axis Bank is the fourth lender to reduce the interest rate after market leader State Bank of India (SBI) reduced the interest rate on savings account.

Today, the key indices escaped a distribution day due to lower trading volume, compared with yesterday’s session. The distribution day count for the Nifty and the Sensex currently stand at 3.0 and 4.0, respectively. The Indian market is currently 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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