Daily Big Picture: Nifty rebounds after a record Fall

Today’s Action

Nifty, +2.5%; Sensex, +2.7%; Nifty Midcap, +1.1%; Nifty Smallcap, -1%; Model Portfolio, 0%

Daily Market Review

Market Pulse : Downtrend

Indian markets rebounded from yesterday’s record fall and closed the volatile trading session above 7,800. 35 out of 50 Nifty stocks closed in the green. Infosys(+12%), Adani Ports and Special Economic Zone(+11.5%), and Britannia Inds.(+10.6%) were the top gainers on Nifty. Today, Nifty breached its yesterday’s low and made a new low of 7,511.1, however, closed in the upper half of the day's range. So, today’s action qualified as the day one of an attempted rally.

On the sectoral front, barring Nifty Realty, all the sectoral indices closed in the green. Nifty IT (+6.1%) gained the most followed by Nifty FMCG and Nifty Pharma which gained 3.2% and 2.8%, respectively. Advance-Decline ratio was in favor of decliners. Of 2,124 stocks traded, 799 advanced, 987 declined, and the remaining traded flat.

We continue to suggest a cautious approach until the general market conditions improve. Most of the stocks continue to take on technical damage with many moving deeper into their respective bases and breaking below logical levels of support. Without trying to predict and decode stories, we will take what the market gives us and continue to monitor unfolding conditions. We will continue to monitor quality ideas with rising relative strength lines and superior fundamentals that could be set up to buy when and if the market begins to stabilize.

Key News

Infosys(+12%): The company received notification from the SEC saying it has concluded investigation in connection to certain whistleblower complaints.

The Finance Minister made a series of announcements. Last date for filing IT returns for FY19 has been extended to June 30. Similarly, the last date for filing GST returns for March, April, and May has been extended till June 30. Further, the government announced no late fee or penalty up to 15 days on GST filing for companies with turnover up to Rs 5 crore.

Currently, we do not hold any stocks in our portfolio. Nifty and Sensex advanced 2.5% and 2.7%, respectively. In the broader market, Nifty Midcap was up 1.1%, while Smallcap was down 1%.

Our current portfolio holding is Nil. Markets are currently not conducive for new positions. It is better to protect capital by staying on the sidelines than to take risks.

We will continue to monitor quality ideas with rising relative strength lines and superior fundamentals that could be set up to buy when and if the market begins to stabilize.

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