SGX Nifty Indicates Muted Opening; Kesoram Industries to Raise Funds

At 8:15 am IST, SGX Nifty Futures were trading at 17,791, compared with Nifty’s close of 17,764, Thursday.

Market Pulse: Confirmed Uptrend

Distribution Day Count:

Nifty50: Five Nifty Midcap100: Four Nifty Smallcap100: Five

Global Stock Markets: Dow 30, -0.8%; Nasdaq, +0.4%; S&P 500, -0.1%; Nikkei, -0.3%; Kospi, +0.9%; Shanghai Composite, +0.4%.

Last week was a tough week for investors as the markets were highly volatile. After a flat close on Monday, Nifty was down for the next three trading sessions. The index breached its 21-DMA on Tuesday. Weakness intensified on Wednesday and the index breached the key level of 50-DMA. Nifty closed below its 50-DMA for the first time since May 15.

Barring Nifty Auto (+0.4%), all sectoral indices closed lower for the week. Nifty Metal (-5.3%) declined the most, followed by PSU Bank (-3.4%) and Realty (-3.3%).

The distribution day count currently stands at five. Nifty’s breach of the 50-DMA is a good enough reason to downgrade the market to an Uptrend Under Pressure. However, we are waiting for one more session as Thursday was a weekly expiry day. If it fails to reclaim the 50-DMA, we will downgrade 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

Cadila Healthcare received final approval from the U.S. FDA to market Decitabine for injection, which is used to treat myelodysplastic syndromes, certain types of blood, or bone marrow cancer.

Kesoram Industries’s board approved fundraising plan to raise up to Rs 2,500 crore by equity and/or other debt instruments. The fundraising plan is to retire the existing debt and bring down the cost of borrowing.