U.S. Markets Close Lower; SGX Nifty Indicates Flat Opening

At 8:00 am IST, the SGX Nifty Futures was trading at 14,381, compared with Nifty’s close of 14,311 yesterday.

Market status: Downtrend

Distribution days: Seven

Global stock markets: Dow30, -0.2%; S&P 500, +0.01%; Nasdaq, -0.4%; Nikkei, +1.1%; Kospi, +0.9%

Yesterday, Nifty opened over 200 points lower amid imposition of night curfews in several states and possibility of imposition of lockdown in Maharashtra. Losses intensified as the session progressed. It lost another ~350 points from opening and closed 600 points lower compared with the previous session. Yesterday’s session qualified as a distribution day as the fall was more than 0.2% on volume higher than the previous session. Nifty found support at its 100-DMA, which has been a crucial historical support. Barring Nifty Pharma (+0.5%), all the sectoral indices closed in the red. Nifty PSU Bank (-8.7%) declined the most followed by Realty (-7.3%). Financial-related sectors continued to drag the market down.

We moved the market to a Downtrend as Nifty breached its 50-DMA on higher volume, distribution day count increased to seven, and many leading stocks failed to hold logical support levels. Looking forward, we will shift the market to a Rally Attempt if Nifty establishes a bottom and stays above today’s low (14,249) for three straight sessions. From there, we would prefer to see a [follow-through day] before shifting the market back to a Confirmed Uptrend. Should this occur, the focus will be on ideas breaking out of early-stage base patterns and showing the best relative strength with good accumulation.

Key News

Tata Consultancy Svs. declared its Q1 FY22 results. Profit grew 6.3% q/q to Rs 9,246 crore, while revenue grew 4% q/q to Rs 43,705 crore.

Hindustan Copper (Nse) approved the issue price of Rs 119.60 per equity share for the QIP issue.

Foreign institutional investors (FIIs) net sold shares worth Rs 1,746.43 crore, while domestic institutional investors (DIIs) net bought shares worth Rs 232.76 crore.

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, 30%; Rally Attempt, 12%; Uptend Under Pressure, 52%; Downtrend, 6%.

For the 24 developed markets tracked by our institutional research team, the market status breakdown is as follows: Confirmed Uptrend, 65%; Rally Attempt, 10%; Uptend Under Pressure, 25%; Downtrend, 0%.