Market Pulse
Weekly Action
Nifty, +1%; Sensex, +1.25%; Nifty Midcap, +1.5%; Nifty Smallcap, +1.2%; and Model Portfolio, 0%.
Weekly Market Review
Nifty, after starting the week on a weaker note, gained sharply in the latter half and closed above 11,000. The market status was changed to a Rally Attempt as it managed to trade above Tuesday’s low for the next two sessions. Today, Nifty reclaimed its 200-DMA intraday but was not able to close above it.
On Wednesday, the repo rate was cut by 35bps to 5.4%, reverse rate adjusted to 5.15%, and the bank rate to 5.65%. This was the fourth consecutive rate cut, totaling a cut of 110bps in 2019. MPC maintained a policy stance at Accommodative.
During this week, we had downgraded the U.S. market to a Downtrend after the S&P 500 and Nasdaq gapped down below their respective 50-DMA. But since the market could hold above its low for three days, the status was changed to a Rally Attempt.
On the sectoral front, the weekly performance was mixed. Nifty Metal, Energy, Media, and PSU Banks ended in losses (2–2.5%). On the flip side, Nifty Auto (+3%) and IT (+2.6%) were top gainers. Nifty FMCG, Bank, and Realty were up 1–1.5%. In the broader market, Nifty Midcap (+1.5%) and Smallcap (+1.2%) gained, but are trading below key moving averages.
Looking ahead, we would prefer to see a follow-through day before shifting the market back to a Confirmed Uptrend. On the flip side, if Nifty breaches its day 1 low of 10,814, the market will be moved back to a Downtrend.
Events in the upcoming week:
- Aug 12: CPI inflation data for July
- Aug 14: WPI inflation data for July
Stocks in News
Britannia Inds.: The Company reported Q1 FY20 results during market hours. It missed consensus on all fronts. Revenue grew 6.2% y/y to Rs 2,700 crore. PAT declined 3.5% y/y to Rs 249 crore and margin eroded by 70bps y/y to 14.6%. The stock was down 3% and trading at a 52-week low, below 50- and 200-DMA. The stock was up 0.4%.
Hindalco Industries: The Company reported Q1 FY20 results during market hours. Revenue was down 3.6% y/y to Rs 29,972 crore. PAT declined 27.9% y/y to Rs 1,063 crore and margin came lower by 140bps y/y to 12.6%. The growth and earnings declined due to slowdown in demand globally and lower commodity prices. The stock was down 2.7% and trading at a 52-week low, below its 50- and 200-DMA.
Yes Bank: The Company announced the opening of qualified institutional placement (QIP) at a floor price of Rs 87.90 per share to raise about Rs 2,000 crore. The stock was down 8%.
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