Nifty Scales New High, Closes Above 13,500; FMCG and PSU Banks Lead

Nifty, +1.9%; Sensex, +2.3%; Nifty Midcap, +1.2%; Nifty Smallcap, +1.9%; Model Portfolio, -0.7%.

Market Pulse: Confirmed Uptrend

Distribution Day Count: Three

Weekly Market Review

Nifty continued the last week's momentum and hit a new high for three consecutive days. However, on Thursday, the market was under selling pressure and added a distribution day. Today, Nifty made a new high but remained volatile throughout the session and closed 0.3% higher. Nifty Midcap and Smallcap relatively underperformed the benchmark indices. Nifty is trading 3.5% and 9.0% above its 21- and 50-DMA, respectively. On the sectoral front, Nifty PSU Bank and Metal closed 6–8% higher for the week. Nifty Bank, Energy, IT, and Financial Services closed 1.5–2.0% higher. On the flip side, Nifty Auto and Metal were down 1.2% and 0.5%, respectively.

We maintain a positive view of the overall market as indices trend into new highs with low distribution day count. Further, leadership remains widespread across multiple sectors. We continue to recommend a selective approach to increasing risk. Focus on high-quality ideas emerging from sound bases with an RS line at or near a new high. After a strong rally, pullback/consolidation (if any) is a constructive sign if Nifty holds its short-term moving averages. On the flip side, tracking distribution days is crucial. Accumulation of distribution days can be a sign of market top and halt the uptrend.