Market Pulse: Confirmed Uptrend

Distribution Day Count: Four

Today, Nifty opened briefly in the green but failed to hold gains as the session progressed. After falling more than 50 points in the opening hour, it traded sideways in a narrow range. Volume was lower, so we will not consider it a distribution day. For June, Nifty’s overall volume was low. During the month, volume was above average for only one day. For most sessions, volume was 30–40% lower than the average volume. The broader market had mixed action.

On the sectoral front, Nifty Pharma (+1.1%) and Auto (+0.9%) were the top gainers. Nifty FMCG closed 40bps higher, while Media closed flat. On the flip side, Nifty Bank, Metal, Financial Services, IT, and Metal closed 0.2–0.6% lower. The advance-decline ratio was in favor of advancers, as out of 2,257 stocks traded, 999 stocks advanced, 927 stocks declined, and the remaining closed flat.

We recommend a selective, patient approach to adding risk. It is crucial to continue to monitor the action for signs of health or crack in the market and leaders. If the index falls further below its 21-DMA and adds a distribution day, we may change the market status to an Uptrend Under Pressure. 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

-Most auto companies reported their June sales numbers ahead of consensus estimates.

Tata Motors’s total sales in June grew 125% y/y to 43,704 units.

T V S Motor’s total sales in June grew 27% y/y.

Mahindra & Mahindra’s total sales in June grew 70.3% y/y. Tractor sales grew 32% y/y.

Maruti Suzuki India’s total sales in June grew 156% y/y to 1.47 lakh units.

Ashok Leyland’s total sales in June grew 169% y/y to 6,448 units.

Alembic Pharmaceuticals got the U.S. FDA’s nod for its Nitrofurantoin capsules, used to treat urinary tract infection.

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