SGX Nifty Indicates Flat Opening; IIP Grew 11.5% in July

At 8:15 am IST, SGX Nifty Futures was trading at 17,360, compared with Nifty’s close of 17,370 last Thursday.

Market Pulse: Confirmed Uptrend

Distribution Day Count:

Nifty50: One Nifty Midcap100: Four Nifty Smallcap100: Four

Global stock markets: Dow 30, -0.8%; Nasdaq, -0.9%; S&P 500, -0.8%; Nikkei, -0.2%; Kospi, -0.4%; Shanghai Composite, -0.1%.

Last week, Nifty traded in a narrow range of 17,254–17,436 and consolidated gains after a solid upward move. It closed 0.3% higher on a weekly basis, thus closing higher for a third consecutive week. During the week, the broader market indices outperformed the general market. Midcap and smallcap were up 0.9% and 2.3%, respectively. Sectoral action was mixed. Nifty Media (+3.8%) was the top gainer, followed by Nifty Energy, Metal, FMCG, and Fin Service, which closed 0.2–1.0% higher. On the flip side, Nifty Pharma (-1.1%) was the top decliner. On Thursday, FIIs and DIIs were net buyers at Rs 423 crore and Rs 704 crore, respectively.

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, however, 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.

Key News

Zomato will stop its grocery delivery service from September 17 mainly on account of gaps in order fulfillment, leading to poor customer experience.

-Government reduced the standard rate of duty on crude palm oil, soybean oil, and sunflower oil to 2.5%

-IIP grew 11.5% in July mainly due to a low-base effect and good performance by the manufacturing, mining, and power sectors.