Daily Big Picture – Key Indices Face Sell-off at Higher Levels; Nifty Ends Below 10,000

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Today’s Action:

Benchmark indices started the day with minor gains. However, the indices slipped into red barely an hour into trade, and ended the day with losses. Broader markets fell along with the headline indices.

Daily Market Review

The benchmark indices started on a positive note in today’s trade. However, the gains were short-lived, as the indices slipped into red within the first hour of trade. By the close of trade, both the headline indices lost about four-fifth of a percentage point, and the Nifty closed below the 10,000 mark.

Today, the Nifty opened higher at 10,068.35, and reached an intraday high of 10,083.80. The index started losing ground in the morning and reached an intraday low of 9,947.00, before finally settling at 9,978.55, down 0.78% from yesterday’s closing price. Similarly, the BSE Sensex, after opening higher at 32,341.05, hit an intraday high of 32,354.77. The index sold off as the day progressed, reaching an intraday low of 31,915.20, and closed for the day at 32,014.19, down 259.48 points or 0.80% 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 252 stocks advanced, compared with 1,221 stocks declining, and 28 stocks remaining unchanged.

The broader markets underperformed the headline indices as the Nifty Midcap and Smallcap indices lost 1.21% and 1.71%, respectively, in today’s session.

Today, the MarketSmith India IND 47 Index, which lists the top 47 stocks in chart on fundamental characteristics, lost 1.43%.

On the sectoral front, barring the Nifty Metal index, which advanced 1.47%, all sectors ended in red. Among the losers, the Nifty Realty, PSU Bank, and Energy indices dragged the market the most with declines of 4.40%, 2.39%, and 1.70%, respectively.

Yesterday, the markets regulator SEBI has imposed trading restrictions on 162 listed entities suspected as shell companies by the Ministry of Corporate Affairs. The restrictions include limiting trading in the affected companies to once a month, and curbs in the trading of shares by the promoters and directors of the companies. The announcement by the SEBI late on Monday did not reveal the details of the illegal activities the companies have been suspected of.

Today, Idea Cellular has informed the exchanges that it had filed an application before the Ahmedabad Bench of the National Company Law Tribunal (NCLT), seeking approval of its merger with Vodafone India and Vodafone Mobile Services. SEBI had given a conditional go-ahead to the USD 23 billion deal between the companies yesterday. The multi-layered deal, which was announced in March, got clearance from the fair trade regulator Competition Commission of India (CCI) recently.

Bajaj Auto, India’s fourth largest two-wheeler maker, today announced a partnership with UK’s Triumph Motorcycles to jointly make mid-capacity motorcycles for the domestic and global markets. The partnership is of similar nature as the one Bajaj has with Austria-based KTM, where Bajaj holds a 48% stake. Bajaj’s Chakan plant will progressively produce four different brands – KTM, Husqvarna, Triumph, and Bajaj. While Bajaj will play in the entry segment, KTM and Husqvarna will be present in the segment above Bajaj (200 cc and above), and Triumph will be positioned in the segment with engine capacity of 400 cc-800 cc.

Today, the Nifty has picked up a distribution day, taking the distribution day count for the index to 3.0. The tally for the Sensex remains unchanged from yesterday at 4.0, as the index avoided a distribution day due to low trading volume. 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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