Nifty Continues to Hit New High; PSU Banks, Realty, and IT Stocks Outperform

Nifty, +0.3%; Sensex, +0.4%; Nifty Midcap, +0.1%; Nifty Smallcap, -0.03%; Model Portfolio, -0.9%

Market Pulse Confirmed Uptrend

Distribution Day Count: Two

Nifty made a gap up opening but witnessed profit booking and traded toward the day’s low of 13,311. However, it staged a reversal from there to close 0.3% higher as the dip was bought by market participants. It was the fourth consecutive day when Nifty made a new high. Broader markets underperformed as Midcap and Smallcap indices closed flat for the day. Nifty Bank advanced 50 points to reach 30,262.

On the sectoral front, mixed results were seen. Nifty PSU Bank rallied the most followed by Nifty IT and Nifty Realty, which closed 0.8% and 0.7% higher, respectively. However, selling pressure was observed in Nifty IT, Pharma, and private banks. Market breadth was skewed toward decliners. Out of 2,218 stocks traded, 918 stocks advanced, 980 declined, and the remaining stocks unchanged.

With leadership broadening and indices above relevant intermediate term moving averages, we will continue to look for leadership-quality growth names to form entry points. After a strong rally, pullback/consolidation (if any) is a constructive sign if Nifty holds its 21-DMA. It is advised to closely review the existing positions and book partial profits in stocks that are extended from their moving averages. On the flip side, tracking distribution days is crucial. Accumulation of distribution days can halt the uptrend.