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SGX Nifty Indicates Negative Opening; TCS Q1 Earnings Miss Estimates

Posted Date: July 10 2020
Market Preview

At 8:00 am IST, the SGX Nifty Futures was trading at 10,764, compared with Nifty’s close of 10,813 yesterday.

Market status: Confirmed Uptrend

Global stock markets: Dow 30, -1.4%; S&P 500, -0.6%; Nasdaq, +0.6%; KOSPI, -0.6%; Nikkei, -0.2%; Hang Seng, -1.2%

Yesterday, Nifty after opening higher retained the positive momentum throughout the day and closed above 10,800, holding significant gains. Volume was lower than that of the previous session. Leadership was once again very strong, with many leaders up 2% or more. In the broader market, Nifty Midcap and Smallcap closed with a gain of 0.4% and 1.1%, respectively. FIIs’ net buying was Rs 212 crore and DIIs’ net selling was Rs 805 crore.

On the sectoral front, barring Nifty FMCG (-0.3%), all other sectors closed in the green. Nifty Metal (+2%) gained the most, followed by Nifty Financial Service and Nifty Bank, which were up 1.6% and 1.4%, respectively. Market breadth was inclined toward advancers. Of 2,130 stocks traded, 1,010 advanced, 799 declined, and the remaining traded flat.

The Indian market remains in a Confirmed Uptrend. However, things can change quickly due to high volatility. We are operating in an uncertain environment where information is distributed unevenly, and it is an environment where outside forces, either intentionally or unintentionally, affect prices across various time frames. We will continue to monitor the behavior of leading stocks and keep an open mind as to how it unfolds. We will wait for solid entry points before buying.

Key News

Tata Consultancy Svs. reported Q1 FY21 results. PAT and revenue came in below estimates, while Q1 margin came in briefly above estimates. PAT was down 12.9% q/q to Rs 7,000 crore. Revenue declined 4.1% q/q to Rs 38,322 crore. Margin contracted 148bps y/y to 23.61%. CEO commented that the company believes that the impact of the pandemic has bottomed out.

General Insurers’ gross direct premium for June showed improvement on a y/y basis. New India Assurance posted growth of 5.29% and market share was maintained at 19.11%. Among health insurers, Aditya Birla Health, Star, and Max Bupa did well.

Punjab National Bank reported a fraud of Rs 3,688 crore in DHFL’s NPA account to the RBI.

Reliance Industries and BP announced their new fuel and mobility joint venture, Reliance BP Mobility Ltd. (RBML). BP has paid $1B to RIL for a 49% stake in the joint venture, with RIL holding 51%.

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, 58%; Rally Attempt, 0%; Uptrend Under Pressure, 42%; Downtrend, 0%.

For the 24 developed markets tracked by our institutional research team, the market status breakdown is as follows: Confirmed Uptrend, 35%; Rally Attempt, 0%; Uptrend Under Pressure, 65%; Downtrend, 0%.

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