SGX Nifty Indicates Positive Opening; FIIs Continue Selling Spree

At 8:15 am IST, SGX Nifty Futures were trading at 17,630, compared with Nifty’s close of 17,503, yesterday.

Market Pulse: Uptrend Under Pressure

Distribution Day Count:

Nifty50: Six Nifty Midcap100: Six Nifty Smallcap100: Seven

Global Stock Markets: Dow 30, +0.6%; Nasdaq, -0.5%; S&P 500, +0.2%; Nikkei, -1.1%; Kospi, -0.4%; Shanghai Composite, -0.2%.

Yesterday, Nifty gapped down more than 100 points and breached Monday’s low. However, there was a smart recovery of more than 300 points from the low and the index closed in the top quartile of the day’s range. Action in the broader market was also constructive. However, the midcap and smallcap indices found resistance near their 50-DMA. On the sectoral front, Nifty Metal (+3.1%) was the top gainer. Nifty Realty, Pharma, and PSU Bank closed 2.0–2.5% higher. FIIs were net sellers at Rs 4,477 crore, while DIIs were net buyers at Rs 1,412 crore.

On Monday, market status was changed to an Uptrend Under Pressure. We will change the status to a Downtrend if more distribution days are added or if Nifty fails to reclaim its 50-DMA and market leaders show signs of deterioration in their price actions. On the flip side, the status will be changed back to a Confirmed Uptrend if Nifty retakes the 18,604 level (the high during the recent rally). Though yesterday’s bounce back was good, investors should not be deceived by such moves and must let the market reclaim its 50-DMA. Proceed with caution. Stocks slipping below their 50- and 200-DMA on above average volume should be sold. Consider exiting stocks that have declined 8% from the buy price.

Key News

-The U.S. will release 50M barrels of crude from the strategic petroleum reserve. India will release about 5M barrels of crude oil from its emergency stocks to cool rising prices.

-Defence Ministry gave its final clearance to around Rs 5,200 crore deal with Russia to manufacture 7.5 lakh AK-203 assault rifles in Uttar Pradesh.

-The government has listed the cryptocurrency bill in its plan for the winter session of the Parliament.

-MD and CEO of Zee Entertainment Ents. disclosed that the merger of Zee and Sony Pictures India is on track and in the final stage.