Market Pulse: Confirmed Uptrend
Distribution Day Count: Four
Global stock markets: Dow 30, -0.4%; Nasdaq, -0.7%; S&P 500, -0.5%; Nikkei, +1.8%, Kospi, +0.1%; Shanghai Composite, +0.6%
Friday, the index opened on a flat note and moved sideways in the first half of the session. In the second half, the index was highly volatile as it moved higher and then gave up all gains to close lower. Last week, the Nifty was down for four trading sessions. The index has been trading along its 21-DMA for the last few weeks. Last week, it tested its 50-DMA and found support around the level. During the week, Nifty Metal (+7.8%) was the major gainer, followed by Media (+2.4%) and IT (+1.9%). Nifty Energy (-2.9%) was the major decliner. Nifty Auto, Bank, FMCG, Pharma and Pvt Bank declined 1.2–1.7%.
Currently, the distribution day count stands at four. Nifty is trading above its 50-DMA and closed just below its 21-DMA on Friday. Reclaiming its 21-DMA is crucial for a further upward move. On the flip side, if the index breaches its 50-DMA on higher volume and adds a couple of distribution days, 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.
Companies Announcing Results Today: Housing Development Fin., Emami, Balaji Amines Limited, Varun Beverages, Carborundum Universal, Punjab National Bank, and others.
Britannia Inds.’s Q1 FY22 PAT decreased 28.7% y/y to Rs 387 crore from Rs 542.7 crore in Q1 FY21. Revenue was flat at Rs 3,403.5 crore. Margin contracted to 16.3% versus 20.5% in Q1 FY21.
Bandhan Bank’s Q1 FY22 PAT decreased to Rs 373.1 crore from a profit of Rs 549.8 crore in Q1 FY21. Net interest income grew to Rs 2,114.1 crore y/y from Rs 1,811.5 crore.
Tata Motors posted sales of 54,119 vehicles in domestic and international markets for July 2021 versus 27,711 units in July 2020.