Weekly Big Picture : Nifty Ends Flat, Broader Indices Continue to Outperform; Vodafone Idea Ends 25% Lower

Weekly Action

Nifty, +0.8%; Sensex, +0.8%; Nifty Midcap, +3.9%; Nifty Smallcap, +3.8%; and Model Portfolio, +2.9%.

Market Pulse Confirmed Uptrend

Weekly Market Review

The markets were flattish through the week, as Nifty traded in a narrow range of over 100 points. The market is awaiting results of big companies like Reliance, HDFC Bank, and TCS. Monday’s action can be volatile, as these companies have high weightage in the index. Broader market indices, Nifty Midcap (+3.9%) and Smallcap (+3.8%), clearly outperformed the benchmark index. Nifty Midcap rose for the ninth consecutive day.

On the sectoral front, Nifty Media (+5.6%) and Realty (+4.4%) were the major advancers. On the downside, Nifty Pvt Bank (-1.6%) and Bank (-1.6%) declined the most.

Additional follow-through day over the next few days will strengthen the current uptrend. We will look for leadership among some good stocks to push the market up and expect multiple high-quality stocks to breakout from their pivot points and make higher highs. We recommend investors stay selective and buy only high-quality growth ideas exhibiting strong relative strength compared with the market.

Look for quality ideas emerging from early-stage bases with high relative strength. Also, stocks that had pulled back in price on low volume when the market was consolidating, and have now rebound from their moving averages when the market started making higher highs, can do well. It is important that investors don’t play all their cards at once. We would suggest adopting an investment approach where you begin with a small allocation and increase it as and when the market advances further.

Key News

Piramal Enterprises: The company will receive $950M from sale of its healthcare insights and analytics subsidiary Decision Resources Group (DRG) to the U.S. based Clarivate Analytics. It will receive $900M after the closure of the deal and $50M at the end of 12 months from the date of closing. The stock advanced 5.5%.

Vodafone Idea: The Supreme Court dismissed the review petition of telecom companies regarding an earlier order, which required the companies to pay Rs 1.47 lakh crore in past statutory dues of adjusted gross revenue (AGR). The stock was down 25%.

What do you think? Please email us any questions or comments.

Leave a Reply

Your email address will not be published. Required fields are marked *