SGX Nifty Indicates Positive Opening; Bata’s Q4 Results Beat Estimates

At 8:00 am IST, SGX Nifty Futures was trading at 15,710, compared with Nifty’s close of 15,635, yesterday.

Global stock markets: Dow30, -0.4%; S&P 500, -0.2%; Nasdaq, -0.1%; Kospi, +0.3%; Nikkei,+0.4 %

Yesterday, Nifty started the session flat and trended higher in the first half. It hit a fresh all-time high of 15,800, after which it staged a downside reversal and dropped 230 points to make an intraday low of 15,566. As the fall was more than 0.2% and volume was higher than in the previous session, it qualifies as a distribution day. However, the distribution day count remains unchanged as one expired at the close yesterday. All the sectoral indices closed in the red. Nifty Media (-2.1%) declined the most, followed by Realty (-1.7%) and PSU Bank (-1.4%). FIIs and DIIs were net sellers at Rs 846 crore and Rs 272 crore, respectively.

Nifty registered a distribution day for the first time since May 11. If the index falls further, adds a distribution day, and breaches its key moving averages, we may change the market status to an Uptrend Under Pressure. We recommend a selective approach to increasing risk. Focus on quality ideas emerging out of sound bases with RS line at or near new highs while reducing exposure to stocks breaking below key support levels.

Key News:

Bata India ’s Q4 FY21 results beat estimates on all fronts. PAT down 23% y/y to Rs 29.5 crore. Revenue declined 4.9% y/y to Rs 590 crore. Margin contracted 350bps y/y to 19%.

Bharat Petroleum, Hindustan Ptl , and Indian oil : India’s fuel demand reduced in May to its lowest since August 2020. Oil demand fell 11.3% m/m to 15.11M tonnes and was down 1.5% y/y.

-Yields for the 10-year U.S. Bonds slid to around 1.5%, lowest in the last three months.

Buy Watchlist: Nippon Life India Asset Management, Bajaj Finance, Sbi Cards And Payment Services, Page Industries, State Bank Of India, Ambuja Cements, Eveready Inds.(India), Varun Beverages, Colgate-Palmolive India, Sharda Cropchem, Berger Paints India, Icici Bank, Cholamandalam Inv.& Fin., Tata Power, and Apollo Hosps.Enterprise.