Weekly Big Picture : Nifty Range Bound Near 12,000; GAIL Q2 Misses Consensus, Allahabad Bank Q2 Widens Loss

Market Pulse Confirmed Uptrend

Weekly Action

Nifty, +0.2%; Sensex, +0.4%; Nifty Midcap, -1%; Nifty Smallcap, -0.8%; and Model Portfolio, +1%.

Weekly Market Review

Market traded range bound swinging between loss and gain following a positive start to this week. While, Nifty found strong resistance near 12,000, Sensex traded above 40,000 and hit fresh high during the week. Nifty Midcap and Smallcap closed the week in negative territory with a decline of 1% and 0.8%, respectively. Today, Nifty added a distribution day, but as one previous distribution day expired today, the count remains unchanged at three. Further, one distribution day will expire on Monday.

On the global front, positive development was observed on the U.S.-China trade deal, which will have a positive impact on the global markets, especially the U.S. market which hit a record high during the week. On the sectoral front, Barring Nifty Bank(+0.4%) and Nifty Realty(+1.7%), all other sectors closed in the red. Realty stocks gained on the backdrop of the government’s clearance to set up a Rs 25,000 crore alternative investment fund (AIF), which aims to complete unfinished home projects.

Looking ahead, we would like Nifty to have a decisive breakout from this week’s consolidation phase with good participation from Midcap and Smallcap stocks. With Nifty in a Confirmed Uptrend, we have a positive view toward the market, however suggest a disciplined approach while adding risk. Investors should focus on non-extended ideas trading above their respective moving averages with RS lines at or near new highs. Along with technical strength, a fresh entry should only be taken in stocks that have sound fundamentals and growth stories.

Key News

Gail (India) (-3.8%) reported Q2 FY20 results during market hours. PAT was down 34.7% y/y to Rs1,167.6 crore. Revenue declined 5.7% y/y to Rs18,250 crore. EBITDA was down 29.8% q/q as the margin declined 370bps q/q to 12.8%.

Allahabad Bank (-3.9%) reported Rs 2,103 crore loss for the quarter ending September. It reported a net loss of Rs 1,816 crore in the quarter, a year ago. GNPA deteriorated 152bps y/y to 19.05% whereas NNPA improved 198bps y/y to 5.98%.

Mahindra & Mahindra(-0.1%) Q2 FY20 revenue was down 5.9% y/y to Rs 23,935.9 crore. PAT at Rs 368.4 crore compared to Rs 1,708.9 crore during the same period last year.

Dr Lal Pathlabs(-2.9%) reported Q2 FY20 results during market hours. PAT was up 41.3% y/y to Rs 81 crore. Revenue grew 15% y/y to Rs 365.6 crore. EBITDA was up 25.3% y/y.

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