SmallCap Stocks Outperform; Kotak Mahindra Bank Q1 PAT and NII Beat Consensus

Nifty, -0.2%; Sensex, -0.2%; Nifty Midcap, -0.04%; Nifty Smallcap, +0.3%; Model Portfolio, +0.7%

Market Pulse: Confirmed Uptrend

Distribution Day Count: Two

Nifty, after a flat opening, traded in a narrow range for the day and closed 0.20% lower. Volume was less compared with Friday’s session. The index thus avoided adding a distribution day. The distribution day count is down to two as two expired last week. In the broader market, Nifty Midcap closed flat, but the Smallcap index was up 0.3%.

On the sectoral front, mixed reactions were observed. Nifty IT, Metal, Media, and Pharma gained 0.2–0.6%. On the flip side, Nifty Realty (-1%) and Nifty Auto (-0.6%) were the top two decliners. The advance-decline ratio was in favor of decliners. Out of 2,035 stocks traded, 955 stocks advanced, 1,008 stocks declined, and the remaining closed flat.

A low distribution day count and Nifty trading above key moving averages is a positive setup. On the flip side, if the index breaches key moving averages on higher volume and adds a couple of distribution days, we may change the market status to an Uptrend Under Pressure. We continue to recommend a selective approach to increasing risk. Focus on quality ideas emerging out of sound bases with RS line at or near new highs while reducing exposure to stocks breaking below key support levels.

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