Weekly Big Picture – Market Overcomes Geopolitical Hurdles to Post Good Gains


MarketSmith India _ Weekly Big Picture.MARKET PULSE

Status: Uptrend Under Pressure


Four up days, one down day

Weekly Market Review

The benchmark indices showed strong resilience this week despite heated geopolitical tensions. The Sensex and the Nifty built on last week’s gains to inch closer towards their all-time highs.

 After an extended holiday weekend, the market started on a positive note with significant gains in Monday’s session. However, news of North Korea firing a missile over Japan shook global markets, sending jitters down the investor’s minds. The Indian benchmark indices tanked over 1%, reacting to this news. The fears were short lived, as the bulls looked over geopolitical issues and lifted the market back to life in the latter part of the week. The market witnessed volatility in Thursday’s session in view of the August derivative series expiry.

The Nifty started the week above the 9,900 mark and traded in the range of 9,783.75-9,983.45. The index closed for the week at 9,974.40, up 1.19%. Similarly, after opening higher at 31,756.87, the Sensex added 0.94% this week to close at 31,892.23, trading at 31,360.81-31,944.10.

 This week, the Nifty added one distribution day on Tuesday, while the Sensex escaped the same due to lower trading volume. The current distribution day count for the Nifty and the Sensex stands at 6.0 and 7.0, respectively. The Indian market condition remains in an Uptrend Under Pressure.

 The broader indices heavily outperformed the key composites this week. The Nifty Midcap and Smallcap indices spiked 3.01% and 4.22%, respectively.

 The MarketSmith IND 47 Index, which lists the top 47 stocks in chart and fundamental characteristics, surged 4.25% this week.

 All the sectoral indices displayed a positive momentum this week barring the Nifty PSU Bank index, which declined 0.80%. The top three gainers for the week were the Nifty Realty, Metal and Media indices, with increments of 5.12%, 3.76%, and 3.32%, respectively.

 Geopolitical woes played out to be a spoiler, yet again, this week. The North Korean military came under the scanner for firing a missile early morning on Tuesday. The missile flew over Japan and landed in the Pacific waters about 1,180 kilometers off the northern region of Hokkaido. On account of the increased uncertainty in the Korean peninsula, the U.S. stock futures, and the European and Asian share markets tumbled.

 Economic data released on Thursday showed that India’s GDP growth has dipped to 5.7% y/y in Q1 FY 2018. This is the lowest level of economic growth in about three years. The weak numbers placed India below China for the second consecutive quarter. The deceleration in the growth is primarily attributed to the government’s demonetisation move and the GST reform.

 The Nikkei Services PMI data to be released on September 5, 2017 could act as a market catalyst in the coming week.

Current Outlook:

– Be cautious with any new purchases.

– Make a defensive game plan for your portfolio.

– Stay disciplined and exercise sound sell rules.

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