Market Status Changed to an Uptrend Under Pressure; VIX Surges Over 27%

Nifty, -2.2%; Sensex, -2.1%; Nifty Midcap, -4.0%; Nifty Smallcap, -4.7%; Model Portfolio, -4.3%

Market Pulse Uptrend Under Pressure

Nifty opened around 130 points higher today but quickly succumbed to selling pressure. The selling started within the first 30 minutes of trading. Today’s fall is the highest since May 18. Domestic cues like outcome of GDP data for the June quarter, outcome of the meeting of SEBI with brokers, leading corporates and exchanges, escalation of Indo-China border tensions, and profit booking can be attributed to today's fall. Volatility index surged over 27% due to the above mentioned factors.

Broader market indices underperformed the market. 96% of Nifty50 stocks declined today showing the broadness of the fall, led by Sun Pharm.Industries (-6.4%) and State Bank Of India (-5.7%). Only Oil & Natural Gas (+2.0%) and Tata Consultancy Svs. (+0.8%) ended in the green. All the sectoral indices closed lower. Nifty Media (-6.2%) declined the most, followed by Nifty Pharma (-5.3%) and PSU Bank (-5.1%). Metal, Financial related, and Auto indices closed 3-5% lower.

Today’s action qualified as a distribution day as the fall was more than 0.2% on volume higher than the previous session. The distribution day count increased to five. Hence, we changed the market status to an Uptrend Under Pressure. We will change the status to a Downtrend, if two-three more distribution days are added or if Nifty breaches the 50-DMA (10,986) and the 200-DMA (10,818). On the flip side, the status will be back to a Confirmed Uptrend if Nifty retakes 11,795 level (high during the recent rally).