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SGX Nifty Indicates Flat Opening; Aurobindo Pharma Q4 Results Beat Estimates

Posted Date: June 26 2020

Market Preview

At 8:00 am IST, the SGX Nifty Futures was trading at 10,064, compared with Nifty’s close of 10,061 yesterday indicating a flat Nifty opening.

Market status: Confirmed Uptrend

Global stock markets: Dow 30, +2%; S&P 500, +1.4%; Nasdaq, +0.8%; KOSPI, +0.6%; Nikkei, -0.1%; Hang Seng, -0.2%; Shanghai Composite, -0.2%.

Yesterday, after a gap-up opening, Nifty continued to gradually move higher. Though the last hour sell-off erased notable gains, Nifty managed to close positive for the session and had the longest winning streak since November 2019. Volume was higher compared with the previous session. 68% of Nifty50 stocks ended in the green.

Barring Nifty IT (-0.7%) and Metal (-0.2%), all sectoral indices closed in the green. Nifty PSU Bank (+5.1%) led the rally, followed by Nifty Realty (+3.1%) and Bank (+2.0%). FIIs’ net buying was Rs 1,851 crore and DIIs’ net selling was Rs 782 crore.

The confidence in the current rally will build up if Nifty is able to trade above its 21-DMA for a few more sessions and if we see the downward trending 50-DMA starting to turn upward. In addition, the broader market participation in the rally is a good sign. We remain in a Confirmed Uptrend and are open to increasing risk selectively in quality names coming out of proper bases despite Nifty having a flat opening.

Key News

Tata Steel’s committee of directors has approved raising Rs 400 crore through a debt issue. The company will allot 4,000 non-convertible debentures having a face value of Rs 10 lakh each on a private placement basis to identified investors.

Bharat Petroleum reported Q4 FY20 loss of Rs 1,819.6 crore due to weak refining margins, inventory losses, and lower sales due to lockdown.

Aurobindo Pharma announced its Q4 results. PAT increased 45.2% y/y to Rs 849.8 crore. Revenue grew 16.4% y/y Rs 6,158.4 crore.

O’Neil Market Condition Report

For the 24 emerging markets tracked by our institutional research team, the market status breakdown is as follows: Confirmed Uptrend, 60%; Rally Attempt, 0%; Uptrend Under Pressure, 40%; Downtrend, 0%.

For the 24 developed markets tracked by our institutional research team, the market status breakdown is as follows: Confirmed Uptrend, 80%; Rally Attempt, 0%; Uptrend Under Pressure, 20%; Downtrend, 0%.

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