Weekly Big Picture – Records Tumble as Bulls Take Centre Stage

Weekly Big Picture

Market Pulse:

Confirmed Uptrend

Highlights:

One down and four up days

Weekly Market Review:

Bulls took the centre stage as India’s benchmark indices advanced right from the word go and scaled onto new highs this week.

Although volatility was at peak due to F&O expiry, the market bulls were on a roll as the Sensex hit all-time highs in all the five sessions of the week.

Optimism over Q1 earnings boosted the investor’s sentiment. Out of the 50 names in the Nifty index, 21 companies have reported their Q1 earnings, out of which around 15 stocks have either met or beat the consensus expectations.

The spark in the bullish momentum came majorly after the GST Council decided to slash tax rates by 10% on a wide range of goods. The Indian key composites pocketed decent gains on Monday, brushing aside weak global cues.

Tuesday was no different as the Sensex hit a new high on the back of strong buying in the metal and realty space.

Bulls took a breather on Wednesday as late-session selling ahead of the expiry day played spoilsport. Both the frontline indices observed a divergent trend where the Nifty was down 0.02% and the Sensex posted a minuscule gain of 0.1%.

But the break didn’t last for long as favorable global cues pushed the Indian stocks higher on Thursday. The announcement of a pact to ease trade tensions between the U.S. and the EU boosted the market sentiment. This time Nifty joined the party and entered into the new high ground for the first time in about six months.

Records kept tumbling as the Sensex ended above 37,000 for the first time in Friday’s session. The Nifty and the Sensex logged weekly gains of 2.4% and 2.3%, respectively. So far this month, both the indices have surged more than 5%, heading for the best monthly gain since April.

The broader market had a dream run, as the Nifty Midcap and Smallcap posted a weekly gain of 4% and 5.3%, respectively.

On the sectoral front, barring Nifty IT (-1.3%) all the indices performed well. Nifty PSU Bank (+10.4%), Metal (+6.7%), and FMCG (+5%) topped the list.

MarketSmith India’s IND 47 index, our proprietary list of top 47 stocks in chart and fundamental characteristics, also fared well, posting a weekly gain of 2.9%.

Today, both the Nifty and Sensex shed two distribution days, as the distribution on June 27 and July 2 became irrelevant with the indices trading 5% higher. As a result, distribution day count stands at one each on both the Nifty and the Sensex. With the Nifty and the Sensex touching a new high today the market direction remains unchanged at a Confirmed Uptrend.

The following events lined up for the coming week could turn out to be market movers:

 Current Outlook:

– Market environment conducive for purchases, but remain selective.

  • – Focus on fundamentally strong stocks breaking out of strong technical patterns.

    – Stay disciplined and exercise sound buy and sell rules.

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