Nifty Closes Near All-Time High; IT and PSU Banks Lead Gains

Nifty, +0.8%; Sensex, +0.8%; Nifty Midcap, +1%; Nifty Smallcap, +0.7%; Model Portfolio, +0.1%

Market Pulse: Confirmed Uptrend

Distribution Day Count: One

Nifty started the session on a positive note and continued to make higher highs during the day. It made an all-time high of 17,532.7 during the day and closed near that high at 17,519. Of the Nifty50 stocks, 70% advanced, led by Ntpc (+7.2%) and Bharti Airtel (+4.5%).

All sectoral indices, barring Nifty Media, closed in the green. Nifty PSU Bank and IT were key gainers today, with gains of 2.8% and 1.8%, respectively. Following GoI-led reforms such as the PLI scheme for the Auto sector, Nifty Auto advanced 0.9% during the day. The advance-decline ratio was in favor of advancers. Of 2,019 stocks traded, 1,262 stocks advanced, 695 stocks declined, and the remaining closed flat.

The distribution day count currently stands at one. Further, Nifty is now trading near its all-time high, above all its key moving averages. We would like the index to continue this trend. After such a sudden rally, one must also be prepared for some mild profit booking. In the process, 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.