SGX Nifty Indicates Higher Opening; Vodafone Idea Continues to Lose Subscribers

At 8:15 am IST, SGX Nifty Futures were trading at 16,628, compared with Nifty’s close of 16,496 yesterday.

Market Pulse: Confirmed Uptrend

Distribution Day Count: Nifty50 - Four     Nifty Midcap100 - Five Nifty Smallcap100 - Six

Global stock markets: Dow 30, +0.6%; Nasdaq, +1.6%; S&P 500, +0.9%; Nikkei, +1.0%; Kospi, +1.5%; Shanghai Composite, +0.8%.

Nifty gapped up about 150 points on open yesterday, taking cues from global markets. However, after a strong start, it failed to hold gains and hit the day’s low of 16,396 in the first two hours of the session. Later, the index posted a minor recovery, closing 0.3% higher. Volume was lower than in the previous session. Broader markets witnessed profit booking and fell sharply. Midcap declined 0.9%, while Smallcap was down 1.9%.

On the sectoral front, Nifty IT (+1.7%), Nifty Financial Services (+0.4%), and Nifty Bank (+0.3%) closed in the green. On the flip side, Nifty Auto, Media, and Realty were down 1.0–1.7%. The advance-decline ratio continued to favor decliners. Of 2,004 stocks traded, 287 stocks advanced, 1,215 stocks declined, and the remaining closed flat.

The distribution day count currently stands at four. Nifty is trading near its all-time high. 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. Over the last few sessions, the broader market seems to have fallen out of favor. Some stocks are displaying poor price behavior, resulting in minor damage to their charts. Shakeouts happen and are a normal course for growth stocks. But we do not want weak action to persist. We recommend being selective when investing in new stocks.

Key News

Indian Hotels to raise Rs 3,000 crore by issuing shares to the existing shareholders upon receiving relevant approvals from the authorities. The proceeds will be used to finance capital expenditure plans, growth plans, and debt reduction.

Vodafone Idea lost 42.8 lakh subscribers in June, reducing its total base to 27.3 crore. Its rivals, Reliance Jio and Airtel added 54.6 lakh and 38.1 lakh customers, respectively.