Pharma and Auto Stocks Drag the Market; Nifty Loses 1.7%

Market Pulse

Confirmed Uptrend

Weekly Action

The Nifty and the Sensex were down on three days during the week: Nifty, -1.7%; Sensex, -1.4%; Nifty Midcap, -2.6%; Nifty Smallcap, -2.6%; Model Portfolio, +2.4%; and MSI Ind 47, -1.9%.

Weekly Market Review

The Nifty lost its key support of 200-DMA and ended 0.5% below it. However, it is trading 1.1% above its 50-DMA. The Nifty breaching its support at 200-DMA line indicates that the market is losing its momentum. This week, Nifty IT (+0.2%) was the only gainer whereas Nifty Pharma (-6.4%) and Auto (-4.3%) were the worst performers.

FIIs and DIIs were net sellers as they dumped stocks worth Rs 48.12 crore and Rs 2,509.20 crore, respectively, for the first four days of this week.

With respect to direction, the Indian market remains in a Confirmed Uptrend. The distribution day count stands at three on the Nifty and four on the Sensex. More distribution days in the upcoming sessions will downgrade the market status to an Uptrend Under Pressure. Considering this, we would suggest adopting an investment approach where you begin with a small allocation and increase it as and when market demonstrates technical strength. On the other hand, investors should be prepared to cut their position in case the market starts to show recurring distribution days and technical weakness.

In the coming week, the following events could move the market:

  • December 11: State election results

  • December 12: CPI for November, IIP data for October

  • December 14: WPI for November

Stocks in News

Hcl Technologies to acquire select IBM’s software products for $1.8B. These products are in large market areas like Marketing, Security and Commerce, which are the strategic segments of the Company. C Vijayakumar, President & CEO, HCL Technologies believes that, with deployment of these products, they can reach and serve thousands of enterprises across the industries and markets. The stock was down 5% today.

Muthoot Finance reported its September quarter results yesterday. Net Income was at Rs 483.8 crore, up 8.5% y/y. AUM grew 21% to Rs 35,956 crore. The stock was up 12.0% today.

Action in Leading Stocks

Leaders Up on Volume: Tube Investments Of India Ltd (+11.2%), Muthoot Finance (4.1%), Pvr (+3.4%)

Leaders Down on Volume: Hcl Technologies (-5.2%), N R B Bearings (-2.3%), Info Edge (India) (-2.0%)