FIIs Continue Selling Spree; Dr Reddy and Vedanta to Announce Results Today

At 8:30 am IST, SGX Nifty Futures was trading at 17,887, compared with Nifty’s close of 17,857 yesterday.

Market Pulse: Confirmed Uptrend

Distribution Day Count:

Nifty50: Three Nifty Midcap100: Four Nifty Smallcap100: Five

Global stock markets: Dow 30, +0.7%; Nasdaq, +1.4%; S&P 500, +1%; Nikkei, -0.1%; Kospi, -0.5%; Shanghai Composite, +0.2%.

Yesterday, Nifty had a muted opening and traded lower for the entire day. Expiry pressure was evident, and the selloff in Nifty and other broad-based indices intensified. Nifty made an intraday low of 17,799.45 and closed in the lower quartile. The fear index was again in action, climbing 6.4%. Broader markets came under pressure in yesterday’s session. On the sectoral front, all indices were under selling pressure. Nifty PSU Bank, Nifty Realty, and Nifty Metal were the biggest laggards and were down 5.2%, 3.8%, and 3.4%, respectively. FIIs remained net sellers (Rs 3,818 crore), while DIIs net buying was worth Rs 836 crore.

Nifty escaped distribution as yesterday’s volume was lower. So, the distribution day count stays at three. The market remains in a Confirmed Uptrend, but if the index adds a couple of distribution days, stages a reversal, or breaches its key moving averages, we may change the market status to an Uptrend Under Pressure. Reducing exposure to stocks breaking below their 21- or 50-DMA on higher volume is important.

Results Today: Adani Power (Nse), Adani Transmissions Ltd, Atul (Nse), Bandhan Bank, Bharat Petroleum, Cholamandalam Inv.& Fin., Dr. Reddy's Laboratories, Emami, Dixon Technologies (India), UPL, Vedanta, Voltas (Nse), and others.

Key News

Ghcl board approved raising Rs 1,000 crore through NCDs.

Kec International won orders worth Rs 1,080 crore in the transmission and distribution segment.

RBL Bank’s Q2 FY22 results missed estimates. PAT was down 78% y/y to Rs 30.8 crore. NII was down 1.8% y/y. GNPA increased 41bps q/q to 5.4%.

Ntpc’s Q2 FY22 PAT and margin missed estimates. Revenue came in line. PAT was down 8.4% y/y.  Revenue grew 14.8% y/y.

Interglobe Aviation’s Q2 FY22 results beat estimates. Revenue grew 7.2% y/y to Rs 5,608 crore. Loss narrowed to Rs 1,435 crore.