Daily Big Picture – Market Mayhem Continues As Rupee Hits All-Time Low

Today’s Action:

Sensex breaches 50-DMA; Nifty Midcap and Smallcap slump to 2018 lows.

Daily Market Review:

Frontline indices closed sharply lower as rupee depreciation and higher crude oil prices weighed on the Indian market.

The expiry session began on a negative note due to weak global cues as major indices remained sluggish through the day.

Amid rising trade war concerns and crude oil prices, the Indian rupee fell to an all-time low of 69 per dollar.

As a result, the Nifty dropped 0.8%, ending at its lowest level in four weeks. The Sensex slipped 0.5% and breached its crucial support of 50-DMA.

Volumes were higher on the both indices compared to yesterday’s session, resulting in a distribution day.

There was no respite in the broader market, as the Nifty Midcap and Smallcap dropped 1.9% and 2%, respectively. Both indices slumped to 2018 lows.

On expected lines, decliners overtook gainers in an 11-4 margin on the NSE.

Most sectors were in deep pain barring Nifty Metal (+0.1%). Among all, Nifty Realty (-2.2%), PSU Bank (-2.0%) and Media (-1.6%) were the worst hit.

MarketSmith India IND 47 index, our proprietary list of top 47 stocks in chart and fundamental characteristics, lost 2.2%.

Talking about market direction, the distribution day count inched higher to four on the Nifty and five on the Sensex. For the Nifty, the previous high of 10,929.20 serves as a crucial resistance zone. With the index falling below its 50-day line, the next level of strong support is around 10,550. The market condition remains unchanged at an Uptrend Under Pressure

While both the key indices are only 4-5% away from their all-time highs, the Nifty Midcap and Smallcap have corrected 18% and 27% from their 52-week highs.

The Nifty Smallcap breached its June 6 low of 7,224 yesterday. The index is now in a Downtrend. The Nifty Midcap also moved to a Downtrend today, as the index breached its June 5 low of 18,033.55.

Current Outlook:

– Be cautious with new purchases.

– Form a defensive game plan for your portfolio.

– Stay disciplined and exercise sound sell rules.

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