Nifty, -1.2%; Sensex, -1%; Nifty Midcap, -4.2%; Nifty Smallcap, -3.7%; and Model Portfolio, -2.2%.
Weekly Market Review
Nifty, after breaching its 50-DMA last week, found support at the 100-DMA, and gained 1% early this week. But after facing resistance near its 50-DMA, it continued to trade lower, breached its 100-DMA and closed 1.2% lower for the week. Nifty added one distribution day on Thursday, taking its count to four. The number of Nifty50 stocks trading above the 50-and 200-DMA narrowed to 10% from 40% at the start of July, indicating weakness in the market.
Barring Nifty IT (+1%), all other sectors closed in the red this week. Nifty Auto (-6%), PSU Bank (-5%), and Pvt Bank (-3.7%) declined the most. Today, the advance-decline ratio was skewed toward decliners. Of the 2,095 stocks traded on the NSE, 425 advanced, 1,347 declined, and 323 remained unchanged.
Looking forward, for an upside reversal, we would like to see Nifty retake its 100-DMA (which has been a key support in last few months) and healthy market breadth. On the downside, we may change the market status to a Downtrend if the Nifty adds two distribution days and leading stocks breach key support levels.
Stocks in News
RBL Bank: The Company’s Q1 FY20 results were in line with expectations. PAT rose 40.5% y/y to Rs 267 crore. Advances grew 35% y/y. Net interest income was up 48% y/y to Rs 817.3 crore and NIM at 4.3% was an all-time high. Management commented that due to the difficult environment, they might face challenges in the near term. The stock was down 14%.
Bandhan Bank: The Company reported Q1 FY20 PAT growth of 45.5% y/y, ahead of consensus. NII grew 36% y/y to Rs 1,410.38 crore. NPAs came at 0.56%, against 0.64% y/y. The stock was up after results but closed 0.3% lower.
Larsen & Toubro: The Company’s power business has bagged orders from Damodar Valley Corporation (DVC) to set up flue gas desulphurization systems in three of its power plants. The order size aggregates between Rs 1,000 crore and Rs 2,500 crore. The stock was down 1.7%.