Market Pulse: Confirmed Uptrend

Distribution Day Count:

Nifty50: Three Nifty Midcap100: Two Nifty Smallcap100: Three

Global stock markets: Dow 30, +1.1%; Nasdaq, +0.5%; S&P 500, +0.8%; Nikkei, -0.2%; Kospi, -0.1%; Shanghai Composite, -0.6%.

During last week, Nifty closed higher on all trading sessions. On Monday, the index scaled 18,000. However, it failed to close above 18,000 on Tuesday. On Wednesday, the index again closed above 18,000 and on Thursday it extended gains above 18,300. Tata Group stocks were the top gainers during the week. Nifty is now trading 3.2% and 6.5% above its 21- and 50-DMA, respectively. Though the benchmark and Midcap indices were moving upward, there were only a few pockets of strength in Smallcap.

On a weekly basis, barring Nifty IT (-1.8%), all indices closed higher. The IT index was down mainly due to weakness in TCS after a little disappointment in its Q2 FY22 earnings. Nifty Auto (+6.5%) was the top gainer. Nifty FMCG, Bank, Financial Services, Realty, and Metal closed 3.5–6.0% higher. One should note that though benchmark indices are making new highs, market breadth was not broad-based during the week.

The distribution day count currently stands at three. Further, Nifty is trading at new highs, above all its key moving averages. We would like the index to continue trading above its key moving averages. We maintain a positive view on the market, but if the index adds a couple of distribution days, stages a reversal, or breaches its key moving averages, we may change the market status to an Uptrend Under Pressure. Reducing exposure to stocks breaking below their 21- or 50-DMA on higher volume is important.

Results Today: Larsen & Toubro Infotech, Route Mobile, Ultratech Cement, Tata Coffee, and others.

Key News

Hdfc Bank announced its Q2 FY22 results on Saturday. NII increased 12.1% y/y to Rs 17,684.4 crore. Advances grew 15.5% y/y to Rs 11.98T, growth was mainly driven by the commercial & rural banking which grew 27.6% and the retail segment which increased 12.9%. CASA deposits were up 28.7% y/y to Rs 6.58T, CASA ratio was at 47% as of Q2 end from 45.5% in Q1.

Avenue Supermarts reported its Q2 FY22 results on Saturday. Consolidated revenue grew 47% y/y and 50% q/q to Rs 7,789 crore. Net profit increased 110% y/y and 338% q/q to Rs 418 crore.

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