MARKET PULSE
Status: Confirmed Uptrend
Highlights:
Four up days, one down day
Weekly Market Review
The benchmark indices extended gains from last week in a record setting spree, this week. Both, the Sensex and the Nifty marked all-time highs on Monday, after rallying over 1% each. The indices held on to the positive zone with small increments on Tuesday and Wednesday, thereby extending their highs. Heavy accumulation in Thursday’s session, helped amass a weekly gain of over 2%. However, the benchmark indices snapped from their winning streak to post marginal losses, likely due to profit booking, in today’s session. Despite one down day, the key indices recorded their best weekly gain in the last four months.
The Nifty started the week at 9,719.30 and traded in the range of 9,646.45-9,913.30. The index finally closed at 9,886.35, up 2.28% from last Friday’s close.
After opening the week at 31,510.62 points, the Sensex closed at 32,020.75, advancing 2.10% from the previous Friday’s closing price. During the week, the Sensex traded in a range of 31,471.41-32,109.75.
Meanwhile, the benchmark indices dropped a distribution day due to ageing, further strengthening their uptrend. The current distribution day count for key indices stands at 1.0, while the market condition remains in a Confirmed Uptrend.
Though the broader markets maintained healthy gains in this week, the Nifty Midcap and Smallcap indices significantly underperformed the headline indices with gains of 0.96% and 0.61%, respectively.
The MarketSmith IND 47 Index, which lists the top 47 stocks in chart and fundamental characteristics, declined 0.39%, this week.
The sectoral chart displayed a positive picture with all the sector composites advancing higher, except the Nifty Realty index (-1.13%). The top gainers for the week were the Nifty PSU Bank, Energy, IT, and Pharma indices with gains of 4.12%, 3.22%, 2.41%, and 2.41%, respectively.
Economic data for the month of June, suggested at slowing consumer activity. The country’s Consumer Price Index inflation data released on Wednesday dipped to 1.54%, below RBI’s stipulated floor rate of 2%. It is the lowest level since 1999, reflecting on poor demand and weak economic activity. Further, WPI inflation for June, released earlier today, eased to 0.9% against 2.17% for the month of May. The decline in wholesale inflation was due to lower inflation levels in manufacturing, fuel and food articles.
This week marked the beginning of Q1 FY 2018 earnings season with Tata Consultancy Services and Infosys announcing their results. TCS missed the consensus estimates by a sharp margin, as it reported a 10% q/q decline in net profits. Stronger rupee and wage hikes accounted for a weak quarter. On the other hand, Infosys comfortably beat market expectation by its performance in Q1. The IT biggie, reported a 3.33% q/q growth in net profits for the latest quarter.
The following events could serve as market movers in the coming week:
– Q1 FY 2018 earnings announcement of GRUH Finance, HUL, Wipro, Can Fin Homes and Dewan Housing, to name a few.
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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