Weekly Big Picture : Nifty Closes Below 11,000; Media and Metal Stocks Drag

Market Pulse

“Downtrend”

Weekly Action

Nifty, -2.5%; Sensex, -2.0%; Nifty Midcap, -2.8%; Nifty Smallcap, -4.7%; and Model Portfolio, -4.6%. 

Weekly Market Review

Nifty breached its key 200-DMA support during the week on Tuesday and is trading below its key moving averages, indicating weakness. Thus, we changed the market status to a Downtrend, a phase where market exposure needs to be trimmed or zeroed.

The weakness was seen across the sectors. Barring Nifty IT (+0.5%), all the sectors ended in losses. Nifty Media (-12.3%), Metal (-8.7%), and PSU Bank (-7.3%) lost the most. Nifty Midcap (-2.8%) and Smallcap (-4.7%) continue to underperform the Nifty50 index. All the 11 sectoral indices are trading below their 50-DMA.

The market is in a Downtrend and today’s action qualifies as Day 1 of the bottom. If the market stays above today’s low for the next two sessions, we will change the status to a Rally Attempt. From there, to upgrade the status to a Confirmed Uptrend, we would like to witness a follow-through day.

Noteworthy events in the upcoming week:

●Aug 5: Services PMI (July)

●Aug 7: RBI rate decision

Stocks in News

State Bank Of India: NII grew 5.3% y/y to Rs 22,938 crore. PAT was at Rs 2,312 crore for the June quarter. GNPA came flat sequentially at 7.53%, improving from 10.69% in Q2 FY19. The Company postponed listing of SBI General Insurance business by a year. The stock ended 2.7% lower today.

Housing Development Fin.: Revenue was up 31% y/y led by one-time income of Rs 1,895 crore from stake sale in Gruh Finance. PAT increased 46% y/y to Rs 3,203 crore. NII increased 6.9%. The stock ended 1.8% higher today.

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