Daily Big Picture – The Nifty sinks by 96 points, broader markets under pressure

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Today’s Action:

Markets opened below their key milestone levels and continued to trade lower. Registering major losses, the broader markets are under pressure.

Daily Market Review

The benchmark indices saw a gap down opening amid global selloff on account of a crisis in the White House. The Markets continued to be weak and closed in the negative terrain. Broader markets depicted weakness for the second consecutive day and corrected heavily, and have been moved to under pressure now.

Opening below the key milestone level of 9,500, at 9,453.20, the Nifty dropped 96 points or 1.01%, to end the day at 9,429.45. The range observed for the day was 9,418.10 – 9,489.10. The index is currently 1.08% off its recent high.

With a gap down opening of 192 points at 30,466.82, the Sensex shed 224 points or 0.73% by the close of the market. The index traded in a wide range of 30,393.72 – 30,575.83. The index is currently 0.84% off its recent high.

The fall in the Sensex was observed on higher volumes as compared to yesterday’s session, marking another distribution day today. However, the volumes on the Nifty were lower than yesterday.

The broader indices saw a sharp correction and are under pressure now. The Nifty Midcap witnessed its highest one day fall post November 15, 2016. The Nifty Midcap and Smallcap were down 2.31% and 2.47%, respectively.

The William O’Neil IND 47 Index, which lists the top 47 stocks in chart and fundamental characteristics lost 1.9% in today’s trading session, underperforming the Nifty’s performance.

On the sectoral front, the correction was widespread in almost all the sectors. The only sector to close in the positive was the Nifty IT, closing at a gain of 1.2%. The top three sectors which were hit the hardest today, were Nifty Realty (-3.42%), Metal (-2.79%), and Auto (-2.11%).

On May 17, the Cabinet approved a coal linkage policy named SHAKTI or the Scheme to Harness and Allocate Koyla (Coal) Transparently in India. Under the policy, long-term coal linkages to power companies will be auctioned, which is expected to revive 30,000 MW of power plants in India. Major beneficiaries in the private sector are GMR Energy, DB Power, CESC, Reliance Power, and Adani Power, among others. The GOI also seeks to reduce the dependence on imported coal. Hence, the policy will help in reducing the trade deficit.

Axis Bank announced its decision to cut home loan interest rates by 30 basis points to 8.35% for loans up to INR 30 lakh for the salaried segment borrowers., marking the lowest interest rates in the industry. The decision comes on the back of SBI, ICICI Bank, and HDFC lowering their housing interest loan rates below 30 Lakh.

Maruti Suzuki has requested its parent Company, Suzuki Motor Corporation (SMC) to advance the commissioning date of the second production line (capacity of 250,000 units a year), which is under construction in Gujarat and is expected to be completed by 2018,  from the prior target of 2019. Chairman of Maruti, RC Bhargava, stated that the retail trends are excellent, but they are not able to replenish the inventory on time.

Despite the ongoing efforts led by OPEC to tighten the oil market by cutting production, the oil prices dipped today, weighed down by a supply glut in the market.

IRB Infrastructure Developers Ltd’s infrastructure investment trust (IRB InvIT) fund today, gaining a mellow 1.2% in the early trade.

The Indian market outlook stays at a Confirmed Uptrend as the Nifty and the Sensex are trading near all-time highs with a distribution count of 2.0 and 5.0, respectively.  The Sensex picked up a Distribution Day today.

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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