Market Pulse: Confirmed Uptrend
Distribution Day Count: Three
Global stock markets: Dow 30, -2.0%; Nasdaq, -1.1%; S&P 500, -1.5%; Kospi, -0.5%; Nikkei, -0.4%; Shanghai Composite, -0.6%
Yesterday, 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. FIIs net selling was Rs 2,000 crore, while DIIs were net buyers (Rs 1,100 crore).
Nifty has breached its 21-DMA. 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.
Companies Announcing Results Today: Bajaj Finance, Asian Paints, Icici Prudential Life Insurance, and others.
Key News
Hcl Technologies (Nse)’s Q1 FY22 PAT grew 9.4% y/y to Rs 3,214 crore. This was lower than estimates. Deal book grew 37% y/y to $1.66B aided by eight large service deals. The company expects revenue growth in double digits in constant currency for FY22. EBIT margin is expected to be 19–21% for FY22.
Acc’s Q2 CY21 results beat estimates. PAT grew 99% y/y to Rs 533 crore. Revenue grew 49% y/y to Rs 3,884 crore. Margin expanded 230bps y/y to 22.5%. The stock is extended from pivot and trading 7% above its 50-DMA.
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