SGX Nifty Indicates Negative Opening; Reliance, Deepak Nitrite, and Indusind Bank to Report Today

Market Preview

At 8:00am IST, the SGX Nifty Futures was trading at 11,633, compared with Nifty’s close of 11,670 yesterday.

Market status: Rally Attempt

Global stock markets: Dow 30, +0.5%; S&P, +1.2%; Nasdaq, +1.6%; Nikkei, -0.7%; Kospi, -0.7%; Hang Seng, -0.4%

Nifty gapped lower yesterday morning, following global cues. After finding support near 11,600, the index moved 100 points off-lows in the first hour itself. After trading with modest losses, it slipped in the second half and closed 50bps lower. VIX has increased to 24 from a low of 17 at the start of October. Nifty is trading at 1% and 9% above its 50- and 200-DMA, respectively.

On the sectoral front, barring Nifty IT (+0.3%), all other indices closed in the red. The selling pressure was not just concentrated in one sector. Nifty Auto, Bank, Financial Services, Pharma, Metal, and FMCG closed 50–100bps lower. Of 2,213 stocks traded, 649 advanced, 1,169 declined, and the rest remained unchanged.

Looking forward, we would like Nifty to reclaim its 21-DMA. If it fails to reclaim the 21-DMA, 50-DMA (11,542) can act as strong support. We will continue to monitor general conditions and the behavior of leading stocks, looking for evidence that a real move is commencing. During this time, one should look for stocks with quality fundamentals, RS line trending higher, and breaking out from consolidation areas.

Key News

Reliance Industries, Dixon Technologies (India), Deepak Nitrite, Indusind Bank (Nse), and Indian Oil will report their Q2 FY21 results today.

Zensar Technologies reported Q2 FY21 results. Revenue from operations declined 4.1% y/y to Rs 336.7 crore. PAT came in at Rs 63.5 crore compared with Rs 64.3 crore in the corresponding quarter last year.

Tata Chemicals reported Q2 FY21 results. Revenue from operations declined 5.8% y/y to Rs 2,609.4 crore, while PAT dipped 64.0% to Rs 132.1 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, 0%; Rally Attempt, 4%; Uptrend Under Pressure, 80%; Downtrend, 16%.

For the 24 developed markets tracked by our institutional research team, the market status breakdown is as follows: Confirmed Uptrend, 12%; Rally Attempt, 4%; Uptrend Under Pressure, 42%; Downtrend, 42%.