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SGX Nifty Indicates Positive Opening; India’s GDP Declines 23.9% in Q1 FY21

Posted Date: September 01 2020
Market Preview

At 8:00am IST, the SGX Nifty Futures was trading at 11,433, compared with Nifty’s close of 11,387 yesterday.

Market status: Uptrend Under Pressure

Global stock markets: Dow 30, -0.8%; S&P 500, -0.2%; Nasdaq, +0.7%; Nikkei, +0.1%; Hang Seng, -0.3%; KOSPI, +0.9%

Yesterday, Nifty opened around 130 points higher but quickly succumbed to selling pressure. The selling started within the first 30 minutes of trading. The fall was the highest since May 18. Domestic cues such as the outcome of GDP data for the June quarter, outcome of the meeting of SEBI with brokers, leading corporates and exchanges, escalation of Indo-China border tensions, and profit booking can be attributed to the fall. The volatility index surged more than 27% due to the aforementioned factors.

Yesterday’s action qualified as a distribution day as the fall was more than 0.2% on volume higher than the previous session. With the increased distribution day count, we changed the market status to an Uptrend Under Pressure. We will change the status to a Downtrend if two or three more distribution days are added or if Nifty breaches the 50-DMA (10,986) and the 200-DMA (10,818). On the flip side, the status will be back to a Confirmed Uptrend if Nifty retakes the 11,795 level (high during the recent rally).

Key News

India’s GDP for the June quarter declined 23.9% due to the imposition of lockdowns across the country. The real GDP, also known as inflation-adjusted GDP, declined 22.6%. However, the Agriculture sector grew 3.4% due to plentiful rainfall.

Arvind reported its Q1 FY21 results yesterday after market hours. Revenue from operations declined 68.4% y/y to Rs 599 crore. It reported a loss of Rs 97 crore, compared with a profit of Rs 24 crore in the corresponding quarter last year.

Ntpc will seek shareholder’s permission to raise Rs 15,000 crore through the issuance of bonds. According to the proposal, the funds are to be raised on a private placement basis in one or more tranches not exceeding 30.

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, 54%; Rally Attempt, 8%; Uptrend Under Pressure, 30%; Downtrend, 8%.

For the 24 developed markets tracked by our institutional research team, the market status breakdown is as follows: Confirmed Uptrend, 42%; Rally Attempt, 4%; Uptrend Under Pressure, 50%; Downtrend, 4%.

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