Weekly Big Picture – Key Indices Manage to Hold Ground in an Eventful Week

MarketSmith India _ Weekly Big Picture.

MARKET PULSE

Status: Confirmed Uptrend

Highlights:

Three up days, two down days

Weekly Market Review

The benchmark indices started the week on a positive note, making fresh highs. However, the indices came under pressure following uncertainties surrounding various domestic and global events.

The RBI’s bi-monthly monetary policy meeting impacted market movement during the week. As widely expected, the RBI retained repo rate at 6.25%, giving more room to access the economy, post GST release. Further, the central bank reduced statutory liquidity ratio by 50 basis points to 20%.

In line with its global peers, the Indian markets witnessed a volatile week owing to major global events. The rift between Qatar and other Middle Eastern countries, hung Parliament post the U.K. general elections, ECB’s monetary policy meeting, and Comey’s appearance at the U.S. senate restricted market rally in the week.

The Nifty started the week past the 9,600 mark at 9,656.30 and gained 0.15% by the end of the week. It traded in the range of 9,608.15-9,709.30 and closed at 9,668.25.

After opening the week at 31,274.74 points, the Sensex posted a loss of 0.04%, ending the week at 31,262.06. It traded in the wide range of 31,087.28-31,430.32.

Thanks to a sharp recovery in Friday’s session, key indices ended the week on a flat note. The Sensex dropped a distribution day on Monday but added one back in the next trading session. The distribution day count for the Sensex and the Nifty is now at 4.0 and 2.0, respectively. The Indian markets continue to trade in a Confirmed Uptrend.

The Nifty Midcap and Smallcap both gained 1.26% and 0.77%, respectively.

The MarketSmith IND 47 Index, which lists the top 47 stocks in chart and fundamental characteristics, gained 2% this week.

On the sectoral front, the Nifty Pharma, Metal, and Realty indices were the top three gainers, with increments of 2.73%, 2.54%, and 2.22%, respectively, while Nifty FMCG, IT, and Energy were the top three losers, with -1.74%, -1.57%, and -0.59%, respectively.

Talking of the market action through the week, benchmark indices started off with a solid gain on Monday. Both the Sensex and the Nifty recorded fresh closing highs, assisted by rally in realty and financial stocks. However, the cheers were short lived, as bears took control over the markets in anticipation of RBI’s two-day monetary policy meeting. Tuesday’s losses came on high volumes, adding a distribution day to both the indices.

In Wednesday’s trading session, benchmark indices were range bound and traded flat for most of the session until RBI announced to keep the interest rates unchanged. Towards the end of the session, the market picked up pace and closed with smart gains.

The outcome of the RBI’s bi-monthly policy meeting was overshadowed by major global events, which kept investors cautious in the remaining two trading sessions. General elections in the U.K., European Central Bank’s policy meeting, and James Comey’s testimony played catalyst to markets in Thursday’s session. In a sudden turn of events, markets recouped most of the losses on Friday boosted by the auto and banking stocks.

The following events could serve as market movers in the coming week:

– The May 2017 Consumer Price Index data: June 12, 2017

– The May 2017 WPI Inflation: June 14, 2017

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