MARKET PULSE
Status:
Downtrend
Highlights:
Three up and two down days
Weekly Market Review:
Market bears remained in the driver’s seat, as India’s key indices went downhill for the fourth straight week.
The U.S. Federal Reserve interest rate hike, Facebook’s data scandal, global trade war concerns and the Indian Parliament logjam were more than enough to keep market optimists on the sidelines for the most part of the week. Eventually, the Nifty and the Sensex tumbled 1.9% and 1.8%, respectively.
With frontline indices breaching crucial support levels and previous lows, we downgraded the Indian market outlook to a Downtrend.
The week started on a poor note. The Nifty breached its 200-day line for the first time in 15 months. Benchmark indices tumbled about 1% on Monday, as investors resorted to profit-booking ahead of the Fed meeting.
Tuesday’s trade saw a choppy session, with the Sensex and the Nifty managing to make small gains of 0.3% and 0.2%, respectively. Domestic political tensions continued as the Telugu Desam Party protested in the Parliament demanding a special status for Andhra Pradesh.
Despite a gap-up opening on Wednesday, the market succumbed to profit booking in the latter half of the session. Both Nifty and Sensex ended with small gains of 0.3% and 0.4%, respectively.
After two positive sessions, bears made a comeback, sending the frontline indices about 0.4% lower on Thursday.
On Friday, investors’ fears of a global trade war materialised. The Nifty slipped 1.2% and breached the crucial 10,000 support level for the first time in five months.
Concerns of a global trade war became a reality after China announced plans to impose tariffs of up to $3 billion on U.S. imports following Donald Trump’s decision to slap duties worth $60 billion on Chinese goods, owing to the theft of intellectual property.
Broader indices had a terrible week, as Nifty Midcap and Smallcap indices plunged 3.1% and 5.3%, respectively.
From the sectoral point of view, all indices drowned in the sea of red. The top losers were Nifty PSU Bank (-7.4%), Realty (-6.9%), and Metal (-5.9%).
MarketSmith India’s IND 47 index – our proprietary list of top 47 stocks in chart and fundamental characteristics, declined 4.3% this week.
We changed the market status to Downtrend on Monday, after key indices failed to hold above their previous lows of March 8. The breaching of 10,000 level of Nifty is likely to dampen investor sentiment further. The U.S.-China trade war proceedings might continue to put downward pressure on the market in the coming days.
Current Outlook:
– Avoid fresh buys, do not average down.
– Protect profits, cut losses.
– Build a watchlist.
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