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SGX Nifty Indicates Positive Opening; Reliance Buys Future Group’s Businesses

August 31 2020
Market Preview

At 8:00am IST, the SGX Nifty Futures was trading at 11,753, compared with Nifty’s close of 11,647 on Friday.

Market status: Confirmed Uptrend

Global stock markets: Dow 30, +0.6%; S&P 500, +0.7%; Nasdaq, +0.6%; Nikkei, +1.9%; Hang Seng, +1.4%; KOSPI, +0.3%

During the last week, Nifty gapped up higher in all the five sessions and also managed to close in the green. Volume was relatively lower in the first two sessions, but higher during the last three. Nifty closed 3% and 6% above its rising 21-and 50-DMA, respectively. Broader markets continued to do well. It has four distribution days, with one set to expire this week.

On the sectoral front, barring Nifty FMCG (-1.1%) and Metal (-0.1%), all other indices closed higher. Nifty Bank (+10%) outperformed, followed by Financial Services (+5%), Realty (+4%), and Auto (+2.3%). All the sectoral indices are trading above their 50-DMA. Barring Nifty Bank, Financial Services, and Realty, all other indices are trading above the 200-DMA.

The Indian market remains in a Confirmed Uptrend. Despite the rise in 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

Wockhardt reported its Q1 FY21 results during the weekend. Revenue from operations declined 17.2% y/y to Rs 177 crore. PAT was Rs 766 crore compared with a loss of Rs 83 crore in the corresponding quarter last year. PAT came higher due to an exceptional item of Rs 1,484 crore.

Reliance Industries announced the acquisition of Future Group’s businesses for Rs 24,713 crore. Reliance Retail will now have access to close to 1,800 stores across Future Group's Big Bazaar, FBB, Easyday, Central, and Foodhall formats.

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, 54%; Rally Attempt, 12%; Uptrend Under Pressure, 34%; Downtrend, 0%.

For the 24 developed markets tracked by our institutional research team, the market status breakdown is as follows: Confirmed Uptrend, 42%; Rally Attempt, 4%; Uptrend Under Pressure, 50%; Downtrend, 4%.

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