Nifty Starts the Week on a Strong Note; IT and Auto Stocks Outperform

Nifty, +1.0%; Sensex, +1.0%; Nifty Midcap, -0.2%; Nifty Smallcap, -0.04%; Model Portfolio, -0.3%

Market Pulse Confirmed Uptrend

Distribution Day Count: Three

Nifty started the session on a record high of 14,474 and was volatile throughout. It ended the session on a strong note as it closed near the day's high at almost 14,500. Broader market indices, Nifty Midcap (-0.2%) and Smallcap (-0.04%), closed lower. Among Nifty50 stocks, 62% of the stocks closed higher, led by Tata Motors (+11.4%) and Hcl Technologies (Nse) (+6.1%).

It was a mixed reaction on the sectoral front. Nifty IT (+3.3%) was the top gainer, followed by Auto (+2.6%). On the flip side, Nifty Media (-1.5%) declined the most, followed by PSU Bank (-1.5%) and Metal (-1.0%). Market breadth was skewed toward decliners. Of 2,249 stocks traded, 768 advanced, 1,176 declined, and the remaining were 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. If a pullback/consolidation happens, it will be crucial for Nifty to hold its 21-DMA. 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 as rise in distribution days can halt the uptrend.