Weekly Big Picture – Nifty Trades in Narrow Range and Ends Flat; Kotak Mahindra Bank Falls 4% on Block Deal

Market Pulse

Rally Attempt

Weekly Action

Benchmark indices closed higher at the end of the week. Nifty, +0.6%; Sensex, +0.2%; Nifty Midcap, +2.0%; Nifty Smallcap, +2.7%; Model Portfolio, +0.7%; and MSI Ind 47, +0.2%.

Weekly Market Review

The Nifty traded in an extremely narrow range today, with difference between day’s high and low less than 0.2%. After two positive days, this was a flat day for the Sensex and the Nifty, whereas Nifty Midcap and Smallcap extended moderate gains.

The week marked as a small reversal in previous week’s sell-off. The Nifty made a week’s low of 10,585.7 on Tuesday, but managed to rebound without breaching low of 10,583.6, which was crucial to determine the market status. On Wednesday and Thursday, the Nifty showed positive momentum indicating a probable reversal.

On the sectoral front, the Nifty Metal (+6.2%) was the top gainer for the week, supported by rallies in Jindal Steel & PowerVedanta, and Hindalco Industries on the back of improving metal and steel prices. Nifty PSU (+3.1%) and Auto (1.8%) gained momentum after weaker performance in recent few weeks. PSUs were also supported by recapitalization announcement of about INR 48,000 crores by the government. Except Nifty IT (-0.8%) and Nifty FMCG (-0.2%), all other sectoral indices ended in the green for the week. Both IT and FMCG have largely outperformed other indices in previous few months.

The market status remained unchanged. After we moved the status to a Rally Attempt, the market failed to give a follow-through day. We will look for a legitimate follow-through day on the Nifty before we upgrade the market to a Confirmed Uptrend. However, we will downgrade the status to a Downtrend if the Nifty breaches 10,583.6 level.

Following events scheduled post market hours can move the market next week:

● February 24: Outcome of GST Council’s meeting on GST rate cuts for some sectors.

● March 1: Nikkei Markit Manufacturing PMI for Feb 2019

Stocks in News

KOTAK BANK: The stock ended 4% lower today as ING Group reportedly sold part of its stake in the bank. The block deal was reported to be of 5.87 crore shares, amounting to about 3% stake in the bank.

TATA STEEL: The Company, in an exchange filing, announced that it will hold board meeting on February 26 in which it will consider the issuance of unsecured NCDs through private placement mode. The stock ended 0.7% higher today.

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