Market Pulse: Confirmed Uptrend

Distribution Day Count: Four

Today, Nifty opened 50 points lower and remained under selling pressure, trading toward the day’s low of 15,578 in the first half of the session. In the second half, the index attempted to cover some losses and closed 0.8% lower. As the index fell more than 0.2% on higher volume than in the previous trading session, it added one distribution day. In the broader market, the Smallcap index and Midcap index each declined 1.4%.

On the sectoral front, barring Nifty FMCG (+0.1%), all sectors closed in the red. Nifty Media (-2.6%) was the major decliner, followed by Nifty Metal and Nifty Realty, which were down 2.3% and 2.5%, respectively. Financial stocks continued to remain under selling pressure. Nifty Pvt Bank, Nifty Bank, Nifty Fin Service declined 1.5–2%. The advance-decline ratio was in favor of decliners. Out of 2,316 stocks traded, 458 stocks advanced, 1,492 stocks declined, and the remaining closed flat.

Nifty is currently placed 0.3% above its 50-DMA. It is crucial for the index to find support at its 50-DMA, post a smart recovery to reclaim its 21-DMA, and trade above these moving averages. On the flip side, the distribution day count stood at four. If the index breaches key moving averages 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 out of sound bases with RS line at or near new highs while reducing exposure to stocks breaking below key support levels.

Key News

Bajaj Finance reported its Q1 FY22 results. Net interest income increased 8.1% y/y to Rs 4,489 crore. PAT stood at Rs 1,002.4 crore whereas provisions rose to Rs 1,750 crore q/q from Rs 1,231 crore. GNPA came in at 2.96% as against 1.79% in Q4 FY21.

Asian Paints reported its Q1 FY22 results. The bottom line missed the consensus. Revenue was up 91.1% y/y to Rs 5,585.4 crore. The company posted PAT of Rs 574.3 crore against a profit of Rs 219.6 crore in Q1 FY21. EBITDA margin stood at 16.4%.

Jubilant Ingrevia reported its Q1 FY22 results. Revenue was up 209.4% y/y to Rs 1,138.5 crore. The company posted PAT of Rs 168.3 crore as against a profit of Rs 54.4 crore in Q1 FY21. EBITDA margin stood at 24.2%.

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