Nifty Breached 200-DMA; Realty and Auto Stocks Drag Market

Today’s Action

Benchmark indices witnessed a sharp sell-off for three consecutive days. Nifty, -1.7%, Sensex, -1.6%, Model Portfolio, -2.4%; MSI Ind 47, -1.9%.

Daily Market Review

The Nifty and the Sensex ended in red for the third consecutive day ahead of OPEC meeting which may result in possible supply cut. In addition, the arrest of Huawei’s CFO in Canada may lead to fresh round of trade concerns between the U.S. and China.

On the sectoral front, none of the indices managed to escape the selling pressure. Nifty Realty (-2.4%) and Nifty Auto (-2.2%) declined the most. Sun Pharm.Industries (+1.7%), JSW Steel (+0.3%) were the leaders whereas, Indiabulls Housing Fin (-5.5%) and Maruti Suzuki India (-4.6%) were the losers among Nifty50 stocks.

The Nifty Midcap and Smallcap are down 1.6% and 1.7%, respectively.

The advance-decline ratio was in favor of decliners. Of the 2,063 stocks traded on the NSE, 412 advanced, 1,321 declined, and 330 remained unchanged.

The market status remains unchanged at a Confirmed Uptrend. Markets witnessed huge sell-off on higher volume leading to distribution day on both the Nifty and the Sensex. With that, the distribution day count stands at three on the Nifty and four on the Sensex. We would suggest investors to track fundamentally strong stocks trading above their 50- and 200-DMA and take positions on strong breakouts. Investors should begin with a smaller allocation and increase it gradually as market displays positive signals like additional follow-through days.

Stocks in News

 Sonata Software acquired Australia-based Scalable Data Systems, which can bring great value in Microsoft Dynamics 365 capabilities and resources to Sonata. The stock was up 4.3% today.

Mindtree’s largest investor Cafe Coffee Day’s co-founder, V.G. Siddhartha, is looking to sell his stake in the Company. V.G. Siddhartha, Coffee Day Enterprises, and Coffee Day Trading Ltd together hold around 21% stake in Mindtree. Private equity firm KKR may take major stake. The stock was down 1.1% today.

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