RBI Says GNPA Ratio of Banks Improved; IIFL Securities Opens its Rs 90 Crore Share Buyback

Market Preview

At 8:00am IST, the SGX Nifty Futures was trading at 14,059, compared with Nifty’s close of 13,932 yesterday.

Market status: Confirmed Uptrend

Distribution days: Three

Global stock markets: Dow30, -0.2%; S&P 500, -0.2%; Nasdaq, -0.4%; Nikkei, -0.7%; Kospi, +0.5%; Hang Seng, +1.1%

Yesterday, Nifty opened at a record high above 13,900 but witnessed profit booking and traded toward the day's low of 13,860 in the initial two hours of the session. However, it posted a smart recovery of about 70 points off lows during the day and closed holding decent gains. Volume was lower than the previous session. The broader market underperformed compared with the general market. Midcap closed 0.1% lower, while smallcap closed flat for the day.

On the sectoral front, mixed reaction was observed. Nifty Pvt Bank (+1.6%) advanced the most, followed by Nifty Bank and Fin Service, which were up 1.4% and 1.0%, respectively. On the flip side, Nifty Media (-1.5%) and Nifty Metal (-1.1%) were the top two decliners. Market breadth was skewed toward decliners. Of 2,247 stocks traded, 942 advanced, 951 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.

Key News

Glenmark Pharms. (Nse) launched a fixed dose combination drug to treat type-2 diabetes in the country.

Lupin (Nse) launched Mycophenolate Mofetil tablets in the US. The tablets are used to help prevent the body from rejecting organ transplant.

Iifl Securities will open its Rs 90 crore share buyback from today.

According to a report published by RBI, GNPA ratio of scheduled commercial banks decreased from 9.1% in March 2019 to 8.2% in March 2020 and further to 7.5% in September 2020.

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, 80%; Rally Attempt, 4%; Uptrend Under Pressure, 16%; Downtrend, 0%.

For the 24 developed markets tracked by our institutional research team, the market status breakdown is as follows: Confirmed Uptrend, 70%; Rally Attempt, 0%; Uptrend Under Pressure, 30%; Downtrend, 0%.