At 8:00am IST, the SGX Nifty Futures was trading at 11,109, compared with Nifty’s close of 11,050 Friday.
Market status: Downtrend
Global stock markets: Dow 30, +1.3%; S&P, +1.6%; Nasdaq, +2.3%; Nikkei, +0.7%; Hang Seng, +0.6%; KOSPI, +1.3%
Last week, the market was under selling pressure, with Nifty losing 4%, while Midcap and Smallcap nosedived more than 5%. We moved the market to a Downtrend on Tuesday as Nifty breached its 50-DMA, the distribution day count remained elevated at seven, and many leading stocks failed to hold logical support levels. All the sectoral indices closed in the red during the last week. Nifty Media (-9.0%), Metal (-8.0%), and PSU Bank (-8.0%) were the biggest decliners, followed by Nifty Realty (-7.7%) and Auto (-6.0%). Nifty staged an upside reversal on Friday with FIIs’ net selling of Rs 2,080.21 crore, whereas DIIs’ net buying was worth Rs 2,070.63.
Today, the Supreme Court will hear the loan moratorium and interest waiver case. SC is looking into a waiver of interest amount during the six-month moratorium period. If the apex court orders waiver, banks will have to take a hit, estimated at about Rs 2T. Without an interest waiver, thousands of borrowers who availed moratorium will be charged compound interest and the loan repayment burden will increase significantly.
Under this market conjuncture, investors should wait for the market to show credible signs of recovery and meanwhile, observe the stocks that show resilience under falling market scenarios. Looking forward, we will shift the market to a Rally Attempt if Nifty establishes a bottom and stays above Friday’s close for the next two straight sessions. From there, we would prefer to see a follow-through day before shifting the market back to a Confirmed Uptrend. Should this occur, the focus will be on ideas that show the best relative strength with good accumulation.
National Aluminium (Nse) signed a MoU with Numaligarh Refinery Ltd. for the long-term supply of CP Coke to ensure raw material security.
Jsw Energy’s subsidiary JSW Solar Limited received a Letter of Awards for wind capacity of 810 MW from Solar Energy Corporation Ltd. against a tariff-based competitive bid.
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, 12%; Rally Attempt, 4%; Uptrend Under Pressure, 68%; Downtrend, 16%.
For the 24 developed markets tracked by our institutional research team, the market status breakdown is as follows: Confirmed Uptrend, 4%; Rally Attempt, 4%; Uptrend Under Pressure, 60%; Downtrend, 32%.