Weekly Big Picture : Nifty Down 0.4% this Week; PSU Banks, Pharma, and Media Stocks Decline

Market Pulse

Confirmed Uptrend

Weekly Action

Nifty, -0.4%; Sensex, -0.3%; Nifty Midcap, -1%; Nifty Smallcap, -1.8%; and Model Portfolio, -1.7%.

Weekly Market Review

The market started the week on a positive note as Nifty gained 1.4% on Monday. The momentum shifted toward negative terrain, as Nifty shed ~2% in the next two sessions. The Indian market is in a Confirmed Uptrend. The index registered a distribution day on Thursday, taking its count to two.

On the economic front, service sector PMI fell to 50.2 in May from 51.0 in April. On Thursday, RBI cut the rate by 25bps to 5.75%. The GDP growth forecast for FY20 is reduced to 7% from 7.2%. MPC changed policy stance from ‘neutral’ to ‘accommodative.’

On sectoral front, most sectors closed in the red. Only Nifty Auto, FMCG, and Metal were in the green, but gains were less than 0.5%. Nifty PSU Bank (-4.3%), Media (-3.3%), and Pharma (-3.3%) were the top losers.

On the global front, the U.S.-China trade situation remains unresolved with each country retaliating by raising and counter-raising tariffs on each other’s exports. But, after a sharp correction in the last two weeks, most indices in the US and Europe were able to hold above their recent lows. As a result, the market status for most of them was changed to a Rally Attempt from a Downtrend.

Today, the advance-decline ratio is skewed toward decliners. Of the 2,029 stocks traded on the NSE, 705 advanced, 1,057 declined, and 330 remained unchanged.

Noteworthy events in the upcoming week:

  • June 12: CPI data for May
  • June 14: WPI data for May

Stocks in News

Manappuram Finance: The stock was down ~10% intraday after some reports suggested that SEBI has given a show cause notice for breach of insider trading regulations. The case is regarding the sharing of unpublished and price-sensitive information. At the close, the stock was down 4%.

Larsen & Toubro: The Competition Commission of India has approved the acquisition of L&T electrical and automation (EA) business by Schneider Electric India Private Limited and MacRitchie Investments. Today, L&T was down 0.1%.

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