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SGX Nifty Indicates Positive Opening; NMDC Q1 Results Miss Estimates on All Fronts

August 28 2020
Market Preview

At 8:00am IST, the SGX Nifty Futures was trading at 11,620, compared with Nifty’s close of 11,559 yesterday.

Market status: Confirmed Uptrend

Global stock markets: Dow 30, +0.6%; S&P 500, +0.2%; Nasdaq, -0.3%; Nikkei, +0.4%; Hang Seng, +0.6%; KOSPI, +1%

Yesterday, Nifty closed modestly higher on volume lower than previous session. After opening around 60 points higher, it traded sideways in the first half of the session. In the second half, it declined over 50 points and pared most of its gains. Futures and options contracts of the August series expired. Relatively, today’s expiry was slightly less volatile compared with previous expiries. FIIs’ net buying was at Rs 1,164 crore, while DIIs’ net selling was Rs 809 crore. Nifty is trading 2.5% and 5.5% above its rising 21- and 50-DMA, respectively. On the sectoral front, barring Nifty IT (-0.1%) and FMCG (-0.3%), all the sectoral indices closed higher.

The Indian market remains in a Confirmed Uptrend. Despite the rise in the distribution day count on Nifty, we remain positive on the general market as the broader market is gaining strength. We would like to see fresh names flexing their muscles for a sustainable rally. We do think it is important to be selective in this environment and we would remain disciplined with entries, requiring a basing period before establishing fresh positions. We will continue to monitor the behavior of the market and keep an open mind as to how it unfolds.

Key News

Nmdc reported Q1 FY21 results. It missed estimates on all fronts. PAT was down 54% y/y to Rs 533 crore. Revenue was down 41% y/y to Rs 1,937 crore, while margin contracted 1,820bps y/y to 39%.

Edelweiss Financial Services entered into a stake sale agreement of its wealth management arm with PAG (Asia-focused alternative investment managers). PAG will acquire a 51% stake in Edelweiss Wealth Management (EWM) at a post-money valuation of $583M.

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, 50%; Rally Attempt, 12%; Uptrend Under Pressure, 38%; Downtrend, 0%.

For the 24 developed markets tracked by our institutional research team, the market status breakdown is as follows: Confirmed Uptrend, 46%; Rally Attempt, 0%; Uptrend Under Pressure, 50%; Downtrend, 4%.

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