SGX Nifty Indicates Positive Opening; Royal Enfield January Sales Increase 8.5% Y/Y

Market Preview

At 8:00am IST, the SGX Nifty Futures was trading at 14,462, compared with Nifty’s close of 14,281 yesterday.

Market status: Uptrend Under Pressure

Distribution days: Six

Global stock markets: Dow 30, +0.8%; S&P 500, +1.6%; Nasdaq, +2.6%; Nikkei, +0.7%; Hang Seng, +1.9%; Kospi, +2.4%

Nifty gapped higher yesterday morning and remained strong throughout the session. The index was around 1.5% higher during the budget hours. As soon as FM concluded the budget, a sharp rally was witnessed, led by Banking and Financial Services stocks. The focus remained on growth with the government going for a higher fiscal deficit. The other part that the market liked the absence of major negatives such as tax hikes in the budget.

Advance-decline ratio was skewed toward advancers. Out of 2,252 stocks, 1,356 advanced, and 567 declined. On the sectoral front, Nifty Bank, Financial Services, and Realty closed 6–8% higher. Nifty Auto and Metal closed 4–5% higher. On the flip side, Nifty Pharma (-0.5%) closed in the red.

Last week, market status was changed to an Uptrend Under Pressure as Nifty breached its 21-DMA and the distribution day count was elevated. The status will be back to a Confirmed Uptrend if Nifty retakes 14,754 (high during the recent rally). With the Nifty rebounding sharply from its 50-DMA, we will continue to look for leadership-quality growth names to form entry points. At the same time, we will continue to monitor the market and look for signs of weakness.

Key News

Ajanta Pharma, Alkyl Amines Chemicals, Escorts, Housing Development Fin., and Dixon Technologies (India) will report their Q3 earnings today.

Pvr raised Rs 800 crore through a qualified institutional placement at an issue price of Rs 1,440 per share.

Castrol India reported its Q3FY21 results. Revenue surged 220% y/y to Rs 2,997 crore. PAT increased 210% to Rs 583 crore.

Eicher Motors sold 68,887 Royal Enfields units in January 2021 compared with 63,520 units in January 2020.

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, 38%; Rally Attempt, 0%; Uptrend Under Pressure, 54%; Downtrend, 8%.

For the 24 developed markets tracked by our institutional research team, the market status breakdown is as follows: Confirmed Uptrend, 16%; Rally Attempt, 0%; Uptrend Under Pressure, 84%; Downtrend, 0%.