SGX Nifty Indicates Positive Opening; The RBI Rejects Muthoot Finance's Proposal to Acquire IDBI AMC

Market Preview

At 8:00am IST, the SGX Nifty Futures was trading at 13,186, compared with Nifty’s close of 13,056 yesterday.

Market status: Confirmed Uptrend

Distribution Day: One

Global stock markets: Dow 30, +1.5%; S&P, +1.6%; Nasdaq, +1.3%; Nikkei, +1.5%; Kospi, +0.6%; Hang Seng, +1.3%

Yesterday, Nifty opened above 13,000 for the first time. It traded range-bound and in the green through the session and ended on a strong note at a new all-time high. All the sectoral indices closed in the green. Nifty Bank (+2.5%) advanced the most, followed by Pvt Bank (+2.3%) and Realty (+1.8%). Market breadth was in favor of advancers. Of 2,213 stocks traded, 1,111 advanced, 756 declined, and the rest remained unchanged.

We are in a Confirmed Uptrend but need to be prudent and cautious while adding fresh positions, as Nifty is currently trading ~20% above its 200-DMA, which is rare. We might expect some pullback in the market. However, a small pullback/consolidation is a constructive sign if Nifty holds its 21-DMA. It is advised to closely review the existing positions and book partial profits in stocks that are extended from their moving averages. We will look for leadership among some good stocks to push the market up. On the flip side, tracking distribution days is crucial. An accumulation of distribution days can halt the uptrend.

Key News

Muthoot Finance’s proposal to acquire IDBI AMC got rejected by the RBI.

Jsw Steel acquired a balance of 26.45% of the issued and paid-up share capital of JSW Vallabh Tinplate.

Max Financial Services Ltd reported Q2 FY21 results. The company posted a profit of Rs 81 crore in Q2 FY21, compared with Rs 64.4 crore for the same quarter last year. Revenue advanced to Rs 7,020 crore from Rs 4,686 crore on a y/y basis.

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, 72%; Rally Attempt, 8%; Uptrend Under Pressure, 20%; Downtrend, 0%.

For the 24 developed markets tracked by our institutional research team, the market status breakdown is as follows: Confirmed Uptrend, 88%; Rally Attempt, 0%; Uptrend Under Pressure, 12%; Downtrend, 0%.