Weekly Big Picture – Friday Rally Yields Positive Week For Market

Market Pulse:

Uptrend Under Pressure

Highlights:

Three up and two down days

Weekly Market Review:

In a highly volatile week, market bulls overpowered bears in the final two sessions to help the Nifty and the Sensex post weekly gains.

With investors worrying about high bond yields, the depreciating rupee and rising crude oil prices, the market found itself on the back foot from the outset.

A massive sell-off in broader market indices dampened investor sentiment on Monday. Frontline indices also succumbed to a weak sentiment, slipping 0.7-0.8%.

A quiet session on Tuesday provided investors some respite, with key composites posting gains of 0.1-0.2%.

Bears were back in business on Wednesday, causing slippages of 0.9-1% in the market benchmarks.

But all is well that ends well – that is something the bulls would be speculating. Aided by two strong up-sessions on Thursday and Friday, major indices pulled off a positive week with minor gains of 0.1-0.2%.

Broader market indices lagged once again despite Friday’s strong session. While Nifty Midcap ended 0.6% lower, Nifty Smallcap closed flat for the week.

Buoyed by a falling rupee, IT stocks hogged the limelight in the week gone by. The Nifty IT emerged as the top performer with a gain of 2.3%, followed by Nifty Bank (+1.5%) and Pharma (+1%). On the flip side, Nifty Energy (-1.5%), FMCG (-0.9%) and Auto (-0.7%) posted losses.

MarketSmith India’s [IND 47 index}, our proprietary list of top 47 stocks in chart and fundamental characteristics, outperformed the entire market with a gain of 0.7% this week.

Nifty added one distribution day during the week, taking its distribution day count to four. On Sensex, the count remains unchanged at two.

While the Nifty breached its 50-day line on Wednesday, the index needed just one session to reclaim it back. We see strong support for the index near 10,400. For now, the market outlook remains unchanged at an Uptrend Under Pressure.

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

  • Q4 FY 2018 financial results for Aurobindo PharmaGNA AxlesMahindra & MahindraPower Grid Corp., and Thomas Cook (India), among others.

  • Q4 GDP data: May 31

  • Infrastructure output for April: May 31

  • Nikkei Manufacturing PMI data for May: June 1

    Current Outlook:

    – Be cautious with any new purchases

    – Form a defensive game plan for your portfolio

    – Stay disciplined and exercise sound sell rules

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