SGX Nifty Indicates Flat Opening; IGL Increases CNG Price, PNB Reduces Lending Rate Updated: June 02, 2020

June 02 2020

Market Preview

At 8:00 am IST, the SGX Nifty Futures was trading at 9,821, compared with Nifty’s yesterday’s close of 9,826 indicating a flat nifty opening.

Market status: Confirmed Uptrend

Global stock markets: Dow 30, +0.4%; S&P 500, +0.4%; Nasdaq, +0.7%; KOSPI, +0.7%; Nikkei, +0.8%; Hang Seng, +0.5%; Shanghai Composite, +0.1%.

Yesterday, Nifty opened about 150 points higher taking cues from global markets. The rally was broad based, as Nifty Midcap (+3.1%) and Smallcap (+3.2%) outperformed benchmark indices. All the sectoral indices closed in the green. Nifty PSU Bank (+7.6%) led the rally, followed by Nifty Metal, Financial Services, Media, Bank, Auto, Pvt Bank, and Realty, which gained about 3–4%.

The confidence in the current rally will build up if Nifty is able to trade above its 21-DMA for a few more sessions and if we see the downward trending 50-DMA starting to turn upward. In addition, the broader market participation in the rally is a good sign. We remain in a Confirmed Uptrend and are open to increasing risk selectively in quality names coming out of proper bases.

We do our best to narrow our focus on stocks that meet our leadership profile. This indicates they are showing strong earnings and sales, and also have an interesting potential catalyst – a new product, a new mode of operation, or new management. Once we have identified these companies, it is a matter of buying them after a period of consolidation along with conviction in demand for their shares.

Key News

Indraprastha Gas increased CNG price by Re 1 per kilogram to Rs 43 per kilogram (in national capital) from Rs 42 per kilogram.

V-Guard Industries reported Q4 FY20 results. PAT was down 47.4% to Rs 32.23 crore. Revenue from operations was down 27.4% to Rs 541.1 crore.

Ashok Leyland reported 89% y/y decline in total commercial vehicle sales at 1,420 units in May.

Punjab National Bank reduced its repo-linked lending rate (RLLR) by 40 bps to 6.65%  from 7.05%.

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, 60%; Rally Attempt, 0%; Uptrend Under Pressure, 40%; Downtrend, 0%.

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