Weekly Big Picture – Weak Global Cues Drag Down The Market

MarketSmith India _ Weekly Big Picture.


Status: Uptrend Under Pressure


Two up days, Three down days

Weekly Market Review:

On Monday, the benchmark indices started the week on a bearish note, as the Nifty closed below the 9,900 mark. On Tuesday indices started consolidating as it ended flat on a negative bias. However, after posting heavy losses again on Wednesday, the benchmark indices reversed their trend as both the Nifty and the Sensex settled with gains on Thursday’s trading session. Today, the market indices tried extending their previous day’s gains, but during the last hour, indices slumped justifying the weak global cues arising due to geopolitical tensions.

The Nifty started the week at 9,960.10 and traded in the range of 9,687.55-9,960.50. The index closed for the week at 9,788.60, down 1.76%. After opening at 31,986.40, the Sensex lost 2% this week to settle at 31,283.72. The index traded in the range of 31,081.83-32,016.52.

This week, the Nifty and the Sensex both dropped one distribution days, while the Nifty picked up a distribution day on Wednesday. This takes the current distribution day count to 4.0, for the Nifty and 3 for the Sensex.  The Nifty and the Sensex are down 3.83% and 4.29%, respectively, from their all-time highs. The Indian market condition is changed to Uptrend Under Pressure this week.

Broader indices also sold off this week, as the Nifty Midcap and the Smallcap indices lost 1.55% and 1.60%, respectively.

The MarketSmith IND 47 Index, which lists the top 47 stocks in chart and fundamental characteristics, lost 0.16% this week.

On the sectoral front, barring Nifty Metal which gained 1.68%, all the sectors observed heavy distribution this week. The top three nonperformers were Nifty PSU Bank, Pharma, and FMCG losing 3.51%, 3.09%, and 2.93% respectively.

Government reallocates 92,000 tons of raw sugar import quota to southern India. It allowed an import of 3, 00,000 tons raw sugar at a concessional rate of 25% import duty to boost the supply in southern India.

RBI increases the limits for investments by foreign investors in central government securities by INR 8,000 crore and the limit in state development loans has been increased by INR 6,200 crore.

In stock news, Shares of Bajaj Finance, Hindustan Petroleum, and UPL gained 2-4% intraday as they find their way into the Nifty Index today. Meanwhile, the shares of Bank of Baroda, ACC, Tata Power and Tata Motors DVR have been taken off from the Nifty index.

Zydus Cadila has received approval from the USFDA to market its anti-bacteria drug in strengths of 50 mg, 75 mg, and 150 mg. The drug is composed of doxycycline tablets, which is used for the treatment of different types of bacterial infections such as acne and eye infection.

Acme Solar files IPO application with SEBI to raise INR 2,200 crore. The Company plans to use the issue proceeds to pay debt and finance its 200 MW solar power project in Rajasthan.

Next week the market will remain closed on Monday on account of Gandhi Jayanti. This might be the sole reason for the late selloff, which we observed in today’s trading session.

The RBI interest rate policy meet on October 4 could serve as market movers in the upcoming week.

Leaders Up on Volume: {IGPL} (+3.73%), {MOTILALOFS} (+2.93%), {NSE:SCI} (+2.34%)

Leaders Down on Volume: {NSE:IOC} (-6.76%), {L&TFH} (-3.65%), {DHFL} (-3.26%)

Current Outlook:

– Market environment conducive for new 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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