Today’s Action:
Sensex faces distribution; midcap and smallcap stocks exhibit weakness.
Daily Market Review:
Major indices traded in a narrow range, before ending about 0.2% lower in today’s session. Volumes came in higher than the previous session, resulting in a distribution day on the Sensex. The Nifty escaped distribution as the index limited its loss to 0.19%.
Heavyweights such as Infosys and Reliance Industries dragged the market with losses of 4.6% and 2.6%, respectively.
Broader market indices underperformed compared to their larger counterparts, with both the Nifty Midcap and Smallcap slipping 0.7%.
The overall market breadth remained weak with losers outnumbering winners in a ratio of 3:2 on the NSE.
Talking about sectoral performance, selling pressure was seen in Nifty Realty (-1.8%), Metal (-1.4%) and Pharma (-1.3%). Among the gainers, FMCG (+1%), Bank (+0.3%) and Financial Service (+0.2%) came on top.
Liquor and micro-finance stocks had a tough day at the bourses after the Karnataka CM proposed a hike in tax on liquor and loan waiver for farmers in the state budget.
The MarketSmith India IND 47 index, our proprietary list of top 47 stocks in chart and fundamental characteristics, lost 0.3%.
Coming to the market direction, the distribution day count, which keeps a track of recent institutional selling remains at an elevated level of five on the Nifty and six on the Sensex. Despite a high distribution count, both the benchmark indices continue to trade above their 50-day lines. Hence, the market condition remains unchanged at an Uptrend Under Pressure. For the Nifty, the previous high of 10,929.20 serves as a crucial resistance zone. With the index trading 0.4% above its 50-day line, the next level of strong support is around 10,550.
In the broader market, the Nifty Midcap and Smallcap indices remain in a Rally Attempt.
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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