At 8:00am IST, the SGX Nifty Futures was trading at 12,422, compared with Nifty’s close of 12,264 Friday.
Market status: Confirmed Uptrend
Distribution Day: Zero
Global stock markets: Dow 30, -0.2%; S&P, -0.03%; Nasdaq, +0.04%; Nikkei, +1.9%; Kospi, +1%; Hang Seng, +1.1%
Last week, after testing its 50-DMA, Nifty found support at the level and reclaimed its 21-DMA during the week. The index ended higher in all five trading sessions of the week and is just 1.5% below its all-time high of 12,430. On the sectoral front, barring Nifty Realty (-0.6%), all the sectoral indices closed higher last week. Nifty Pvt Bank (+12.3%) advanced the most, followed by other financial related indices. The advance-decline ratio remained skewed toward advancers.
After a follow-through day last week, we have upgraded the market to a Confirmed Uptrend. Stocks that are breaking out of a consolidation, have higher relative strength, and superior fundamentals can do well. Looking forward, an additional follow-through day will strengthen the current uptrend. We will look for leadership among some good stocks to push the market up. On the flip side, tracking distribution days is crucial. Accumulation of distribution days can halt the uptrend.
The U.S. market has had similar timing in 2016/2020 elections: selloff for a couple of weeks into, but rally two days before election and immediately after. In 2016: Big leaders out of the election were Financials, Small cap, Industrials/Transports, and Energy. In 2020: While early, the first three days are very different than 2016 so far. Big gainers (software, international markets) have gained heavily versus laggards (banks, energy, industrials).
Ipca Laboratories (Nse) reported Q2 FY21 results on Saturday. Revenue increased to Rs 1,361.1 crore as against Rs 1,283.9 crore in Q2 FY20, while PAT surged 38% y/y to Rs 266.7 crore.
Divis Laboratories (Nse) reported Q2 FY21 results, which beat estimates on all fronts. PAT was up 45% y/y to Rs 520 crore. Revenue was up 21% y/y to Rs 1,749 crore, while margin was up 850bps y/y to 42.4%.
Capri Global Capital reported Q2 FY21 results on Saturday. PAT grew 57% y/y to Rs 61 crore, on the back of improvement in NIM and a reduction in cost-to-income ratio on a y/y basis. Total asset under management (AUM) stood at Rs 4,161.30 crore, up 5% y/y.
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, 25%; Rally Attempt, 16%; Uptrend Under Pressure, 55%; Downtrend, 4%.
For the 24 developed markets tracked by our institutional research team, the market status breakdown is as follows: Confirmed Uptrend, 54%; Rally Attempt, 17%; Uptrend Under Pressure, 29%; Downtrend, 0%