Weekly Big Picture – Bulls Refuse To Give Up As Nifty Ends At Record High

MARKET PULSE:

Status: Confirmed Uptrend

Highlights:

Four up days and one down day

Weekly Market Review:

The benchmark indices extended gains from last week in a record setting spree. The Nifty and the Sensex pocketed weekly gains of 1.25% and 1.28%, respectively. On the whole, the positive sentiment in the market is very evident, with the Nifty and the Sensex going up over 5% in the New Year.

The frontline indices started the week on a strong note and kept its momentum throughout the week barring a profit booking on Friday’s session. During the week, the Nifty and the Sensex eclipsed its milestone levels of 11,000 and 36,000 for the first time to close at record high.

While considering the broader markets, both the indices showed ebb and flow pattern. However, the Nifty Midcap managed to snap its last week distribution to pocket 0.69% weekly gains, while small cap continues to lag and dropped 0.61%.

Talking about the sector-specific performance, almost all the sectors ended the week in positive territory barring Nifty Auto and Media. Top performing sectors were Nifty IT (+3.83%), Metal (+2.52%) and Private Bank (+2.16%).

Leading stocks had a good week, as MarketSmith India IND 47 our proprietary list of top 47 stocks, which has strong technical and fundamental characteristics, gained 1.8% this week.

During this week, the Nifty shed one distribution day, whereas no change is observed in the Sensex, leading to a distribution count of one each. Since both the key indices are trading constructively above the moving averages of 50-DMA and 200-DMA and reaching new milestones, we are comfortable in keeping the Indian market status at a Confirmed Uptrend.

On the economic front, the finance minister unveiled details of the bank recapitalization plan that was announced earlier in October 2017. The government will infuse INR 88,139 crore into 20 public sector banks in the current financial year. The capital infusion is part of a massive INR 2.11 lakh-crore bank recapitalisation plan announced by the government in October last year. It is spread over two financial years 2017-2018 and 2018-2019.

Market participants are closely eyeing the budget session, which is scheduled to begin from Thursday (February 1). This will be the last budget of National Democratic Alliance (NDA) government before the 2019 Lok Sabha elections. Investors will eye for measures from the government action with regards to long-term capital gain tax in the upcoming budget. Tomorrow, the Indian stock market will remain closed on the account of Republic Day.

During the coming week, the following events could serve as market movers:

  • Union Budget for FY 2019: February 1, 2018
  • Nikkei Manufacturing PMI data for January 2017: February 1, 2018
  • Q3 FY 2018 results of Larsen, Bajaj Finance, and Titan Company, among others.

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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