Nifty Closes 1% Higher in a Volatile Trading Day; IT and Pharma Stocks Lead the Gain

Nifty, +1%; Sensex, +1%; Nifty Midcap, +0.9%; Nifty Smallcap, +1%; Model Portfolio, +0.1%

Market Pulse Confirmed Uptrend

Distribution Day Count: Four

After a gap up opening, Nifty immediately digested the opening gains and traded toward the day’s low of 13,193 in the first hour. The market was highly volatile in the first half but recovered sharply in the second half and closed near the day’s high posting solid gains. Volume was higher than the previous session. The broader market performed in line with the general market. Midcap closed 0.9% higher, while smallcap closed with a gain of 1%.

On the sectoral front, all the sectors closed in the green. Nifty IT (+3.4%) advanced the most, followed by Nifty Pharma and Metal, which advanced 2.1% and 1.3%, respectively. Further, Nifty Auto, Bank, FMCG, Media, PVT Bank, and Realty were up in the range of 0.5–1.5%. Market breadth was skewed toward advancers. Of 2,233 stocks traded, 1,068 stocks advanced, 818 declined, and the remaining stocks were unchanged.

Looking ahead, we would like the index to hold its 21-DMA and trade above it. It is advised to closely review the existing positions and book profits in stocks that are extended from their moving averages and showing technical weakness. Also, tracking distribution days is crucial. If the distribution day is elevated further, it can halt the uptrend.