MarketsmithIndia Articles

ONGC Reports First-Ever Quarterly Loss; Bank of Baroda Plans to Raise Rs 2,000 Crore

July 01 2020
Market Preview

At 8:00 am IST, the SGX Nifty Futures was trading at 10,232, compared with Nifty’s close of 10,302 yesterday.

Market status: Confirmed Uptrend

Global stock markets: Dow 30, +0.9%; S&P 500, +1.5%; Nasdaq, +1.9%; KOSPI, +1.1%; Nikkei, +0.1%; Hang Seng, +0.5%; Shanghai Composite, +0.3%.

Yesterday, taking cues from global markets, Nifty had a gap-up opening and traded in the narrow range for the most part of the day. However, during the last hour, the index succumbed to selling pressure and closed with a minor loss. Volume was lower than that of the previous session. In the broader market, Nifty Midcap and Nifty Smallcap closed with a loss of 0.2% and 0.6%, respectively.

If we see Nifty add more distribution days, breaching key moving averages, and begin to see leaders falter at support, we will likely shift the market status to an Uptrend Under Pressure.

The Indian market remains in a Confirmed Uptrend. It is important that Nifty holds its 100-DMA (9,972). If Nifty adds distribution days and breaches logical support levels, we may downgrade the market status to an Uptrend Under Pressure. It is prudent to only invest in stocks that have strong fundamentals (i.e., good sales, earnings, margins, etc.) and that are breaking out of sound base structures on heavy volume. The beauty of our CAN SLIM method is that we need not "expect," "hope," or "wish for" with respect to market action. We will take what the market gives us and continue to monitor unfolding conditions.

Key News

Oil & Natural Gas reported Q4 FY20 results yesterday. Revenue from operations declined 19.8% y/y to Rs 21,456 crore. It reported its first-ever quarterly loss of Rs 3,098 crore compared with Rs 4,239 crore profit in the corresponding quarter last year.

Bank Of Baroda plans to raise Rs 2,000 crore to fund its business growth by issuing Basel 3 compliant additional tier 1 bonds.

Godfrey Phillips India announced its March quarter results. Total income increased 4.8% y/y to Rs 709 crore. PAT declined 20% to Rs 38 crore. Revenue from cigarette, tobacco, and related products increased 3% to Rs 589 crore.

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, 62%; Rally Attempt, 0%; Uptrend Under Pressure, 38%; Downtrend, 0%.

For the 24 developed markets tracked by our institutional research team, the market status breakdown is as follows: Confirmed Uptrend, 20%; Rally Attempt, 0%; Uptrend Under Pressure, 80%; Downtrend, 0%.

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