U.S. Markets Close Higher; SGX Nifty Indicates Positive Opening

Market Preview

At 8:00am IST, the SGX Nifty Futures was trading at 13,164, compared with Nifty’s  close of 13,109 yesterday.

Market status: Confirmed Uptrend

Distribution Day: Two

Global stock markets: Dow30, +0.6%, S&P500,+1.1%, Nasdaq,+1.3%, Nikkei, +0.1%; Kospi, +1.4%; Hang Seng, -0.3%

Yesterday, Nifty gapped up higher in the morning and continued its positive momentum throughout the day. It made a high of 13,128 but was not able to move above the all-time high of 13,145. Nifty is trading 3.75% and 8.80% above its 21- and 50-DMA, respectively. The broader market also continued to move higher. Though Nifty is at a fresh high, Nifty Midcap100 and Smallcap100 are 10% and 35%, respectively, below their all-time highs.

On the sectoral front, Nifty Realty (+3.3%) advanced the most, followed by PSU Bank (+2.9%). Nifty IT, Metal, and Pharma closed 1.7–1.9% higher. Market breadth was in favor of advancers. Of 2,230 stocks traded, 1,254 advanced, 640 declined, and the rest remained unchanged.

We are in a Confirmed Uptrend but need to be prudent and cautious while adding fresh positions, as Nifty is currently trading ~20% above its 200-DMA, which is rare. We might expect some pullback in the market. However, a small pullback/consolidation is a constructive sign if Nifty holds its 21-DMA. It is advised to closely review the existing positions and book partial profits in stocks that are extended from their moving averages. We will look for leadership among some good stocks to push the market up. On the flip side, tracking distribution days is crucial. An accumulation of distribution days can halt the uptrend.

Key News

On Friday, the FIIs bought equities worth Rs 3,242 crore, while the DIIs sold equities worth Rs 1,043.2 crore.

Dr. Reddy's Laboratories and Russian Direct Investment Fund (RDIF) commenced clinical trials for Sputnik V vaccine in India.

Godrej Industries received 'A1+' ratings from ICRA for the company's Rs 1,500 crore commercial paper programme.

Eicher Motors’s total sales came in at 63,782 units, up 5.6% y/y.

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, 72%; Rally Attempt, 8%; Uptrend Under Pressure, 20%; Downtrend, 0%.

For the 24 developed markets tracked by our institutional research team, the market status breakdown is as follows: Confirmed Uptrend, 88%; Rally Attempt, 0%; Uptrend Under Pressure, 12%; Downtrend, 0%.