SGX Nifty Indicates a Positive Opening; Hero Moto Q3 Results Beat on all Fronts

Market Preview

At 8:00am IST, the SGX Nifty Futures was trading at 14,955, compared with Nifty’s close of 14,895 yesterday.

Market status: Confirmed Uptrend

Distribution days: Six

Global stock markets: Dow 30, +1.1%; S&P 500, +1.1%; Nasdaq, +1.3%; Nikkei, +1.4%; Hang Seng, +0.8%; Kospi, +0.8%

Yesterday, Nifty opened lower but gained strength as the session progressed and made a new all-time-high. SBI and ITC were the top Nifty gainers. Broader indices continued their outperformance. On the sectoral front, barring Nifty IT (-0.4%), all other indices closed in the green. Nifty FMCG was the outperformer with a gain of 2.5%, followed by Nifty Metal (+2%). Nifty Bank, Auto, and Financial Services continued their rally and gained more than 1.0–1.5%. FIIs’ net buying was Rs 1,938 crore, while DIIs’ net selling was Rs 768 crore.

Last week, the market status was changed to an Uptrend Under Pressure due to a rise in distribution days and Nifty breaching its 21-DMA. Yesterday, Nifty made a new high and moved above the previous rally high of 14,754. Hence, we changed the market status to a Confirmed Uptrend. However, the distribution day count remains elevated at six. Nifty is more than 3.5% above its 21-DMA. If the 21-DMA is breached, we may downgrade the status to an Uptrend Under Pressure. Without trying to predict and decode stories, we will take what the market gives and continue to monitor unfolding conditions.

Key News

Hero Motocorp announced Q3 FY21 results. It beat estimates on all fronts. Revenue surged 40% y/y to Rs 9,775.8 crore. EBITDA was up 36% y/y to Rs 1,413.6 crore.

Tata Power reported Q3 FY21 results. IT missed estimates on all fronts. Revenue grew 7.5% y/y to Rs 7,598 crore, while EBITDA was down 3.1% y/y. Margin contracted 250bps y/y to 23%.

Alkem Laboratories, Cadila Healthcare, Gujarat Gas, Mahindra & Mahindra, and Rashtriya Chemicals and fertilizers will report their Q3 earnings today.

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, 42%; Rally Attempt, 4%; Uptrend Under Pressure, 50%; Downtrend, 4%.

For the 24 developed markets tracked by our institutional research team, the market status breakdown is as follows: Confirmed Uptrend, 16%; Rally Attempt, 0%; Uptrend Under Pressure, 84%; Downtrend, 0%.