Nifty, +9.5%; Sensex, +9.6%; Nifty Midcap, +7.3%; Nifty Smallcap, +6.4%; Model Portfolio, +7.2%.
Market Pulse: Confirmed Uptrend
Distribution Day Count: Six
Weekly Market Review
The market had a fabulous run this week. It closed positive in all the five sessions on the back of growth-focused Union Budget 2021. Technically, Nifty breached its 50-DMA last week. On Monday, Nifty reclaimed it and staged an upside reversal. On Wednesday, market status was changed to a Confirmed Uptrend as Nifty reclaimed previous highs. On the sectoral front, Nifty PSU Bank (+25%) was the top gainer. Nifty Bank and Financial Services advanced around 15% during the week. Nifty Auto, Metal, and Realty closed 10–14% higher.
Today, the RBI’s MPC unanimously decided to keep the repo rate unchanged at 4%. It continues to maintain its accommodative stance as long as necessary to revive growth. The real GDP growth is projected at 10.5% in 2021–2022. The issuance of corporate bonds reached a record level of Rs 5.8 lakh crore during 9M FY21 as compared with Rs 4.6 lakh crore during 9M FY20. RBI projected CPI inflation at 5.4% in Q4 FY21. For H1 FY22, 5.2–5.0% inflation is expected with risks broadly balanced.}
Last week, market status was changed to an Uptrend Under Pressure due to a rise in distribution days and Nifty breaching its 21-DMA. On Wednesday, Nifty made a new high and moved above the previous rally high of 14,754. Hence, we changed the market status to a Confirmed Uptrend. However, the distribution day count remains elevated at six. Nifty is more than 3.5% above its 21-DMA. If 21-DMA is breached, we may downgrade the status to an Uptrend Under Pressure. Without trying to predict and decode stories, we will take what the market gives and continue to monitor unfolding conditions.