Today’s Action:
The benchmark indices recorded sharp losses. In contrast, broader indices continue to trend higher.
Daily Market Review
The Benchmark indices declined significantly in today’s trade, as market sentiment was hit by Federal Reserve’s hawkish outlook on the U.S. economy. After a flat opening, the indices piled up significant losses to close near the day’s low.
After opening the day at 9,617.90, the Nifty traded in the range of 9,560.80-9,621.40, and gave away 0.42% or 40.10 points during the day.
The Sensex closed for the day at 31,075.73, shedding 0.26% or 80.18 points. After opening at 31,222.89, it traded in the range of 31026.48-31229.44.
Today, the Sensex and the Nifty both observed a lower trading volume, thereby avoiding a distribution day.
In the broader market, the Nifty Midcap and Smallcap indices continued to strengthen as they gained 0.29% and 0.17%, respectively. The indices are inching towards reclaiming their all-time highs, currently about 2.85% and 3.5% away.
The MarketSmith India IND 47 Index, which lists the top 47 stocks in chart and fundamental characteristics, lost 0.09% in today’s trading session.
Apart from the three sectors, all the sectors were down today. The Nifty Realty, Pharma, and FMCG were the only indices to gain with increments of 2.16%, 1.25%, and 0.03%, respectively. The top three sectors to lose were Nifty IT, PSU Bank, and Auto losing 0.85%, 0.63%, and 0.60%, respectively.
After the two-day meeting of its Open Market Committee, the U.S. Federal Reserve announced its decision to lift its key benchmark lending rate by 25 basis points to 1.00-1.25% yesterday. Though the decision was in line with consensus estimates, the Fed’s sticking to its guidance of a third rate hike in 2017 dragged the global indices, as market-watchers were expecting the next rate hike to be delayed into the next year.
The benchmark indices have shown signs of weakness, with three down days this week. However, thanks to low trading activity, the indices have not piled up any additional distribution day. The distribution day count for the Nifty and the Sensex remains at 2.0 and 4.0, respectively. The market condition remains in a Confirmed Uptrend.
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