RBI Maintains Key Policy Rates; Voltas, Muthoot Finance Results Come in Below Estimate

Nifty, +3.0%; Sensex, +3.2%; Nifty Midcap, +0.5%; Nifty Smallcap, -0.9%; Model Portfolio, +0.9%.

Market Pulse: Confirmed Uptrend

Distribution Day Count: Three

Weekly Market Review

It was a very strong week for long-term investors as Nifty passed the 16,000 level in style, after consolidating for two months. The index was up in the first four sessions of the week. Today, after a flat opening, it was volatile for the first hour as market participants awaited the outcome of the RBI’s bi-monthly Monetary Policy Committee (MPC) meet. After the announcement, the index fell 100 points sharply and closed near the day’s low.

During the week, barring Nifty Media (-4.5%), all sectoral indices closed higher. Financial-related sectors were the major advancers. Today, the advance-decline ratio was in favor of advancers. Of the 1,986 stocks traded, 1,097 advanced, 827 declined, and the rest remained unchanged.

Currently, the distribution day count stands at three. Nifty is trading near its all-time high. But the broader market action was not very constructive. We will continue to follow the action of leaders and look for constructive behavior and potential entry points to develop. If the index adds a couple of distribution days, stages a reversal, and breaches key moving averages, we may change the market status to an Uptrend Under Pressure. We continue to recommend a selective approach to increasing risk. Focus on quality ideas emerging from sound bases with RS line at or near new highs while reducing exposure to stocks breaking below key support levels.