At 8:00am IST, the SGX Nifty Futures was trading at 11,852, compared with Nifty’s close of 11,889 yesterday.
Market status: Rally Attempt
Global stock markets: Dow 30, -0.8%; S&P, -0.3%; Nasdaq, +0.6%; Nikkei, -0.3%; Kospi, -0.1%; Hang Seng, -0.6%
Yesterday, Nifty opened with modest gains and remained volatile during the first half of the session. It managed to hold above Monday’s low. In the second half, there was good buying, pushing Nifty higher. The index is trading 3% and 11% above its 50- and 200-DMA, respectively. Yesterday’s volume was higher across the board.
On the sectoral front, Nifty Bank was the top gainer, led by 12% gains in Kotak Bank. Nifty Auto, FMCG, Pharma, and Financial Services closed 1–2% higher. On the flip side, IT stocks were under pressure. Though there were notable gains in selected large and midcap stocks, yesterday’s gains were not broad based. Of 2,222 stocks traded, 885 advanced, 917 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.
Sanofi India Ltd reported Q2 FY21 results. Revenue from operations declined 11.8% y/y to Rs 686.6 crore; PAT increased 4.9% to Rs 132.9 crore.
Tata Motors reported Q2 FY21 results. Consolidated revenue fell 18.2% y/y to Rs 53,530 crore. It reported a loss of Rs 307.3 crore compared with a loss of Rs 187.7 crore in the corresponding quarter last year.
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%.