Weekly Big Picture : Nifty Gains 1.1% this Week; Spencer’s Retail to Acquire Nature’s Basket from Godrej Consumer

Market Pulse

Uptrend Under Pressure

Weekly Action

Nifty, 1.1%; Sensex, 1.3%; Nifty Midcap, -0.9%; Nifty Smallcap, -2.1%; and Model Portfolio, -1.7%.

Weekly Market Review

The week that went by presented some impressive performance from benchmark indices thanks to consecutive strong sessions toward the fag end. Both Nifty and Sensex gained over 1% each on Friday ahead of Lok Sabha exit poll results. However, broader indices closed the week with a loss of 0.9% and 2.1%, respectively.

Barring Nifty IT, Metal, and Pharma, all the sectoral indices contributed for today’s strong rally. On a weekly basis, Nifty Financial (+3.2%), FMCG (+2.1%), and Bank (+1.4%) gained the most. Nifty Pharma (-5.5%) was the worst performing sector as the drug companies have been facing a lawsuit of conspiring to inflate prices of many commonly used medications.

Last week, we downgraded the market status to an Uptrend Under Pressure as the Nifty breached its 50-DMA and due to rising distribution. We’ll further downgrade the market if the distribution day count increases to more than 5-6.

Noteworthy events in the upcoming week:

  • May 23: Lok Sabha election 2019 Result
  • May 24: Bank Loan Growth
  • May 24: FX Reserve

Stocks in News

Bajaj Auto: The Company reported its March quarter results today. Net profit rose 21% y/y to Rs 1,306 crore, beating consensus estimates. However, operating profit fell 13% to Rs 1,161 crore and margins contracted 390bps to 15.7%. The stock ended 3.3% higher today.

Spencers Retail: The Company today announced the acquisition of Nature’s Basket, a premium grocery and fresh fruits store, from Godrej Industries for Rs 300 crore. The stock ended 4.1% higher today.

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