At 8:00am IST, the SGX Nifty Futures was trading at 11,675, compared with Nifty’s close of 11,730 yesterday.
Market status: Rally Attempt
Global stock markets: Dow 30, -3.4%; S&P, -3.5%; Nasdaq, -3.9%; Nikkei, -0.8%; Kospi, -1.6%; Hang Seng, -1.3%
Yesterday, Nifty opened with modest gains but quickly slipped into negative territory. The index breached the 21-DMA, which acted as crucial support during the last two sessions. Volume was higher across the board. Nifty is trading at 1.6% and 9.5% above its 50- and 200-DMA, respectively.
On the sectoral front, yesterday’s top gainer, Nifty Bank, Financial Services, Realty, Metal, and Pharma closed 1.5–2.5% lower, weighing on the market. Nifty Auto closed flat, while FMCG closed 0.5% lower. Of 2,215 stocks traded, 627 advanced, 1,186 declined, and the rest remained unchanged.
Looking forward, we prefer to see a follow-through day before shifting the market to a Confirmed Uptrend. A follow-through day is a solid up session, generally a 1.5% or higher gain, with volume being higher than the previous day. However, we are positive on the general market as we can find further evidence of good behavior in leaders that have already broken out; for example, HDFC Bank, Reliance, Infosys, and Asian Paints. During this time, one should look for stocks with quality fundamentals, RS line trending higher, and breaking out from consolidation areas.
Larsen & Toubro reported Q2 FY21 results. Revenue from operations declined 12.2% y/y to Rs 31,034 crore; PAT stood at Rs 5,520.3 crore, while margin declined 65bps to 10.8%.
RBL Bank reported Q2 FY21 results. NII advanced 7.3% y/y to Rs 932.1 crore, while it reported PAT of Rs 144.2 crore as against Rs 54.3 crore in Q2 FY20.
Hero Motocorp reported Q2 FY21 results. Consolidated revenue was up 23.7% y/y to Rs 9,367 crore. PAT increased 9% y/y to Rs 132.9 crore. Margin declined 80 bps to 13.7%.
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, 16%; Rally Attempt, 8%; Uptrend Under Pressure, 76%; Downtrend, 0%.
For the 24 developed markets tracked by our institutional research team, the market status breakdown is as follows: Confirmed Uptrend, 20%; Rally Attempt, 16%; Uptrend Under Pressure, 48%; Downtrend, 16%.