SGX Nifty Indicates a Positive Opening; ICICI Bank to Cut its Stake in ICICI Securities

Market Preview

At 8:00am IST, the SGX Nifty Futures was trading at 13,461, compared with Nifty’s close of 13,393 yesterday.

Market status: Confirmed Uptrend

Distribution days: Two

Global stock markets: Dow30, +0.4%; S&P500, +0.3%; Nasdaq, +0.5%; Nikkei, +0.9%; Kospi, +1.1%; Hang Seng, +1.2%

Yesterday, Nifty made a gap up opening but witnessed profit booking and traded toward the day’s low of 13,311. However, it staged a reversal from there to close 0.3% higher as the dip was bought by market participants. It was the fourth consecutive day when Nifty made a new high. Broader markets underperformed as Midcap and Smallcap indices closed flat for the day. Nifty Bank advanced 50 points to reach 30,262.

On the sectoral front, mixed results were seen. Nifty PSU Bank rallied the most, followed by Nifty IT and Nifty Realty, which closed 0.8% and 0.7% higher, respectively. However, selling pressure was observed in Nifty IT, Pharma, and private banks. Market breadth was skewed toward decliners. Of the 2,218 stocks traded, 918 stocks advanced, 980 declined, and the remaining stocks were unchanged.

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.

Key News

Icici Bank approved a stake sale of up to 2.2% in ICICI Securities via an offer-for-sale.

Pfizer (Nse): The U.S. FDA, after a detailed analysis, has concluded that the company’s COVID-19 vaccine has a “favorable safety profile.”

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, 92%; Rally Attempt, 0%; Uptrend Under Pressure, 8%; Downtrend, 0%.

For the 24 developed markets tracked by our institutional research team, the market status breakdown is as follows: Confirmed Uptrend, 88%; Rally Attempt, 0%; Uptrend Under Pressure, 12%; Downtrend, 0%.