Daily Big Picture – Markets Cling on to Small Gains Ahead of Fed Meeting Outcome

MarketSmith India_William Oneil India

Today’s Action:

Benchmark indices end positive in a volatile session. Broader indices stage a sharp recovery.

Daily Market Review

The Benchmark indices remained volatile for most of today’s session ahead of Federal Reserve’s Monetary Policy Review outcome. The indices dipped from positive to negative territories on numerous occasions, but however, managed to close the day with decent gains.

The Nifty opened at 9,623.20, which was its highest level during the day, declined to an intraday low of 9,580.65, and eventually closed at 9,618.15, up 0.12% from yesterday’s close.

The Sensex closed for the day at 31,155.91, gaining 0.17% or 52.42 points. After opening higher at 31,147.46, it traded in the range of 31,058.92-31,188.63.

Today, the Sensex observed a lower trading volume, while the Nifty experienced a surge in trading volume, in comparison to previous trading session.

The broader indices followed the frontline indices. The Nifty Midcap index gained 0.28%, while the Smallcap index added 0.8% in today’s trading session.

The MarketSmith India IND 47 Index, which lists the top 47 stocks in chart and fundamental characteristics, gained 0.65% in today’s trading session.

On the sectoral front, the top three gainers were the Nifty Energy, Realty, and PSU Bank indices with increments of 1.44%, 1.36%, and 0.92%, respectively, while the Nifty FMCG, Metal, and Financial Services remained on the bottom of the chart with losses of 0.76%, 0.68%, and 0.2%, respectively.

The market observed some volatility in anticipation of Fed’s monetary policy decision, which is to be announced later today. Markets should witness some stability if the Fed increases interest rates, as this expectation has already been priced into the market.

It has been reported that four state-owned lenders – Canara Bank, Syndicate Bank, Dena Bank, and Vijaya Bank – have made presentations about their consolidation plans to the Finance Ministry. Bank of Baroda and Canara Bank are said to be the top two contenders to absorb smaller state-run banks, as the balance sheets of Punjab National Bank and Bank of India are currently weak.

In economic data released by the government, India’s Wholesale Price Inflation for May contracted to 2.17%, significantly lower than April’s inflation rate of 3.85%. The decline in prices of food, fuel and minerals attributed to the decline in inflation rate.

The Indian drug makers are finally getting some respite from USFDA-related troubles. Lupin today announced, it has received final approval from the U.S. regulator for its Oxycodone Hydrochloride tablets. Dr Reddy’s Laboratories has received an establishment inspection report (EIR) from the regulator, for its active pharmaceutical ingredient (API) unit in Telangana.

Benchmark indices struggled to maintain a positive lead in today’s session as they trade about 1% off their all-time highs. Distribution day count for the Nifty and the Sensex is unchanged at 2.0 and 4.0, respectively. Indian market condition is in a Confirmed Uptrend.

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