PSU Bank Stocks Lead the Rally; Karnataka Bank Reports Good Numbers

Today’s Action

Nifty, +0.5%; Sensex, +0.5%; Nifty Midcap, +0.7%; Nifty Smallcap, +0.1%; Model Portfolio, +0.3%

Market Pulse Confirmed Uptrend

Distribution Day Count: Three

Nifty started the session on a flat note and traded in a narrow range in the first half. Around noon, Nifty broke above its day’s range and the market remained in an upward momentum. Intraday, it made a new ATH of 14,590 and closed at a record high of 14,563. Broader market indices, Nifty Midcap (+0.7%) and Smallcap (+0.1%), also closed higher. Among Nifty50 stocks, 56% of the stocks closed higher, led by Tata Motors (+7.9%) and Eicher Motors (+4.6%).

Barring Nifty Pharma (-1.3%), FMCG (-0.6%), and IT (-0.2%) all the sectoral indices closed higher. Nifty PSU Bank (+5.9%) was the top gainer, followed by Realty (+2.8%). Market breadth was skewed toward advancers. Of 2,226 stocks traded, 1,032 advanced, 860 declined, and the remaining were unchanged.

With leadership broadening and indices above relevant intermediate term moving averages, we will continue to look for leadership-quality growth names to form entry points. If a pullback/consolidation happens, it will be crucial for Nifty to hold its 21-DMA. It is advised to closely review the existing positions and book profits in stocks that are extended from their moving averages and showing technical weakness. Also, tracking distribution days is crucial as rise in distribution days can halt the uptrend.