Market Pulse: Confirmed Uptrend

Distribution Day Count: Three

Today, Nifty made a gap down opening of more than 170 points and closed the day significantly lower. As volume was lower than the previous trading session, it escaped adding a distribution day. In the broader market, the Smallcap index closed flat, while the Midcap index was down 0.8%.

On the sectoral front, barring Nifty Pharma (+0.2%) and Nifty Realty (+0.4%), all stocks closed in the red. Financial stocks witnessed intense selling pressure. Nifty Pvt Bank (-2%) was the highest decliner. Similarly, Nifty Fin Service and Nifty Bank were down 1.9% each for the day. The advance-decline ratio was in favor of decliners. Out of 2,316 stocks traded, 938 stocks advanced, 1,048 stocks declined, and the remaining closed flat.

Nifty breached its 21-DMA today after recently reclaiming it. It is crucial for the index to reclaim and trade above this level. On the flip side, the distribution day count stood at three. If the index falls further 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

Hdfc Life Insurance Co reported its Q1 FY22 results. Net premium income was up 31.5% y/y to Rs 7,540 crore. PAT declined 40.2% y/y to Rs 269.6 crore. VNB margin stood at 26.14%.

Indian Bank reported its Q1 FY22 results. NII was up 3.1% y/y to Rs 3,994.2 crore. PAT grew ~3x y/y to Rs 1,181.7 crore. NNPA stood at 3.5% versus 3.4% in Q4 FY21.

Psp Projects reported its Q1 FY22 results. Revenue was up 197% y/y to Rs 317.4 crore. The company posted a PAT of Rs 24.9 crore as against a loss of Rs 3.4 crore. EBITDA margin stood at 12.4%.

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