Markets Closed Off Highs; Adani Ports Acquires Controlling Stake in Krishnapatnam Port

Nifty, +0.8%; Sensex, +0.7%; Nifty Midcap, -0.1%; Nifty Smallcap, +0.6%; Model Portfolio, +0.9%

Market Pulse Rally Attempt

Nifty started the session on a strong note as it gapped up and trended higher to make an intraday high of 11,578. Today’s session was highly volatile as the Supreme Court heard a batch of petitions seeking interest waiver during the loan moratorium period. Supreme Court granted time to the Government of India and the RBI to file additional affidavits. The court will resume the hearing on October 13. Nifty succumbed to selling pressure and quickly lost over 120 points and made an intraday low of 11,452. Buying was seen in the second half, which helped the index close above 11,500.

On the sectoral front, the majority of sectoral indices advanced. Nifty IT (+3.5%) advanced the most, followed by Nifty Metal and Pharma, which advanced 2.6% and 1.7%, respectively. On the flip side, Nifty Media (-0.2%), PSU Bank (-0.1%), and Auto (-0.1%) were the decliners. The advance-decline ratio was in favor of advancers. Of 2,233 stocks traded, 1,047 advanced, 802 declined, and the rest remained unchanged.

Looking forward, we would prefer to see a follow-through day before shifting the market to a Confirmed Uptrend.  (A follow-through day is a solid up session, generally a 1.5% or higher gain, with volume being higher than the previous day). Should this occur, the focus will be on ideas that show the best relative strength with good accumulation. Stocks that recover the quickest tend to lead the next run. On the flip side, if Nifty breaches its recent low of 10,790, the market will be moved back to a Downtrend.