Daily Big Picture – The week begins on an upbeat note

MarketSmithIndia-WilliamOneilIndia

MARKET PULSE

Status: Confirmed Uptrend

Daily Market Review

Witnessing a gap up opening today, the benchmark indices started the week on a vigorous note. The market reacted positively to the macroeconomic data released on Friday, post market hours.

After a strong opening of 9,431.85, the Nifty closed at 9,445.40 to end the day at a smart gain of 0.47% or 45 points. The range observed for the day was 9,423.10 – 9,449.25.  The index closed just 5.25 points away from its all-time high of 9,450.65.

The Sensex added 0.44% or 134 points to its last week’s handsome gain of 1.10%. With an opening and closing of 30,287.37 and 30,322.12, it remains 0.15% off from its all-time high of 30,366.43. The index’s trading range was 30,273.62 – 30,357.96.

However, lower volumes as compared to Friday’s session were observed on both the indices.

A similar excitement was observed in broader markets as well. The Nifty Midcap continues to outperform the key indices with a gain of 0.91%. The Nifty Smallcap performed in line with major markets, with a closing at +0.43%.

The William O’Neil IND 47 Index, which lists the top 47 stocks in chart and fundamental characteristics gained 1.34% in today’s trading session, heavily outperforming the overall market.

Today’s rally was supported by all the sectors closing in green, except for the Nifty IT closing marginally lower by 0.27%. The top three gainers of the day were Nifty Metal, Pharma, and Financial Services closing at a gain of 2.28%, 1.30%, and 0.83% respectively. The rally in metals was backed by the rising copper prices in the global commodity markets.

On May 12, the Government of India (GOI) reported the latest inflation and IIP (index of Industrial Production) figures with the new data series and base year of 2011-2012, to provide a more accurate picture about the prevailing price trend and production output. The consumer price index (CPI) eased to 2.99% in April from 3.89% in March, while the wholesale price index (WPI) fell sharply to 3.85% in April, from 5.3% in March.

Under the old 2004-05 base year series, IIP increased by a mere 0.7% in FY 2017 and 2.5% in March. However, the IIP rose 5% in FY 2017 and 2.7% in March 2017, as per the data based on the 2011-2012 base series. The market cheered the positive macro data, with the Sensex rising as much as 169 points in the early trade. The market expects an interest rate cut by the RBI on account of lower inflation. The BSE and Nifty IT index are down today as the rupee rose in value against the U.S dollar.

On May 12, post market hours, Nestle reported lower-than-expected Q1 2017 earnings results.  The Company’s net sales and net profits grew 9.10% and 6.7%, y/y, respectively. Nestle shares fell 2.82% at the close.

The Indian market outlook stays at a Confirmed Uptrend as the Nifty and the Sensex are trading close to all-time highs with a distribution count of 3.0 and 5.0, respectively.

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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