Weekly Big Picture : Nifty Ends Below 50-DMA; Shree Cement Quarterly Results Miss Estimates

Weekly Action

Nifty, +0.1%; Sensex, +0.3%; Nifty Midcap, -1.4%; Nifty Smallcap, -1.2%; and Model Portfolio, +1.5%.

Market Pulse Rally Attempt

Weekly Market Review

After closing below 50-DMA last Friday, Nifty started the week on a weaker note. However, on Tuesday and Wednesday, Nifty rebounded and retook its 50-DMA. But the index erased gains in the later part of the week and closed below its 50-DMA. Also, the broader market was weak. However, there were some green shoots among quality midcap and smallcap names after good Q3 FY20 results.

On the macro front, industrial production contracted 0.3% in December as against 2.5% growth in the same period last year, on the backdrop of a slowdown in the manufacturing sector. India’s retail inflation based on CPI surged to 7.59% in January from 7.35% in December. WPI inflation for January rose to 3.1%.

On the sectoral front, barring Nifty IT (+1.2%) and Media (+0.5%), all other indices closed in negative territory. Nifty PSU Bank, Metal, and Realty declined more than 3%. Nifty Auto was also down 2.2%. Nifty Bank, FMCG, and Energy were down 0.5–1%.

Looking forward, we would like to see Nifty retaking its 50-DMA and sustain above it. To increase optimism, we would prefer to see a follow-through day. If it occurs, we would shift the market back to a Confirmed Uptrend.

Key News

Pfizer (Nse): The stock declined ~8% after reporting Q3 results. The stock reacted negatively mainly because in Q3 FY20, margin contracted 520bps y/y to 24.8%. Revenue was up 4.7% y/y to Rs 2,281 crore. EBITDA was down 13.5% y/y to Rs 133.4 crore.

Shree Cement: The company reported Q3 FY20 results during market hours. PAT and revenue were below consensus, while the margin was in line. Revenue was up 2.4% y/y to Rs 2,848 crore. PAT grew 3% y/y Rs 310 crore. Margin expanded 30bps to 29.8%. The stock closed 70bps lower.

Idea Cellular (Nse): The stock was down ~25% as the Supreme Court directed at contempt proceedings to be launched against telecom companies for violating the order. The court observed that telecom companies should deposit dues before the next hearing on March 16.

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