Market Pulse:
Highlights:
Two up and three down days (two distribution days)
Weekly Market Review:
Major indices remained range-bound for most part of the week before a late-session rally on Friday aided a positive closing.
Global factors weighed on the Indian market throughout the week. Trade war fears came back to haunt investors as the frontline indices slipped lower in three out of five sessions during the week.
With the Indian government raising duties on the U.S. goods in retaliation to the latter’s move to increase tariffs, the possibility of a full-blown trade war among major economies has gathered steam.
Besides trade war concerns, the minutes of the recent RBI policy meet indicated an inflationary pressure building in the economy, thus dampening the general market sentiment.
Friday’s session was marred by concerns over a possible disagreement between OPEC countries over increasing oil production. However, bulls stormed into action after Iran softened its stance against the deal, sending the Nifty (+0.8%) and the Sensex (+0.7%) higher.
In the end, the Sensex finished the week 0.2% higher while the Nifty closed with a tiny gain of 0.04%, extending their winning streak to five weeks.
Bears stamped authority in the broader market as the Nifty Midcap and Smallcap tumbled 1.2% and 2.6%, respectively. With this week’s loss, the Nifty Smallcap closed in a negative territory for the eighth time in the last nine weeks.
Talking about sectoral performance, private banking and financial services stocks displayed strength. On the flip side, Nifty Metal (-3.1%), IT (-2.4%), PSU Bank (-2.8%), and Realty (-1.9%) came under selling pressure.
MarketSmith India’s IND 47 index, our proprietary list of top 47 stocks in chart and fundamental characteristics, lost 1.8%, largely due to weakness in smallcap stocks.
Despite three down sessions during the week, the Nifty managed to close above the 10,800 level.
During the week, both benchmark indices added two distribution days and lost one, taking the distribution day count to three on the Nifty and four on the Sensex.
As a result, the market condition remains unchanged at an Uptrend Under Pressure. For the market to move to a Confirmed Uptrend, the Nifty needs to reclaim its previous high of 10,929.20. On the downside, we see strong support for the Nifty near its 50-DMA (10,675) and 10,400 levels.
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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