Nifty, -0.7%; Sensex, -0.6%; Nifty Midcap, -0.3%; Nifty Smallcap, +0.6%; and Model Portfolio, +1.3%.
Weekly Market Review
Benchmark indices started off the holiday-truncated week in a volatile manner with Nifty adding a distribution day on Tuesday. The volatility was on account of news that Infosys has overstated its financial statement and a barrier in the Brexit deal. With a marginal gain on Wednesday, the market turned negative the next day but escaped a distribution day. There was no respite on Friday as Nifty traded lower for the most part of the day. However, last hour buying helped indices recover from its lows and closed marginally higher, aided by Nifty Bank. State Bank Of India (+7.3%) was the major gainer followed by Icici Bank (+3.2).
Yesterday, the Supreme Court made a ruling that India’s telecom operators will have to include non-core revenue to calculate levies. Telecom stocks reacted negatively to the news and Vodafone Idea witnessed sharp sell-off and closed with a loss of more than 20% yesterday. The sell-off continues today as well and the stock is down -%.
Broader markets showed a divergent trend during the week. While Nifty Midcap closed 0.3% lower, Smallcap was up 0.6%.
On the sectoral front, Nifty PSU Bank (+2.3%) was the top gainer followed by Nifty Pharma (+1.7%) and Financial (1.0%). On the flip side, Nifty IT (-3.3%) was the worst performer followed by Nifty Metal (-1.8%) and Media (-1.7%).
Looking ahead, we would like Nifty to hold its key moving averages with good participation from Midcap and Smallcap stocks. With Nifty in a Confirmed Uptrend, we recommend focusing on non-extended ideas trading above their respective moving averages with RS lines at or near new highs. On the flip side, if Nifty registers additional distribution days, it will be a subtle sign of weakness in the market.
State Bank Of India results beat street estimates. NII grew 17.7% y/y to Rs 24,600 crore. PAT surged more than 200% to Rs 3,012 crore. Loan growth at 9.6%. GNPA and NNPA improved 34bps and 28bps to 7.19% and 2.79%, respectively.
Piramal Enterprises board approved raising Rs 5,400 crore by rights issue (Rs 3,650 crore) and preferential allotment of compulsory convertible debentures (Rs 1,750 crore). The stock was down 7.6% today.