Market Pulse: Confirmed Uptrend

Distribution Day Count: Three

Global stock markets: Dow 30, +0.5%; Nasdaq, -0.5%; S&P 500, +0.1%; Nikkei, +0.6%, Kospi, -0.3%; Shanghai Composite, +0.1%

Nifty opened on a positive note yesterday and extended gains in the first half, making a new all-time high of 16,360. However, it failed to hold gains, staged a reversal, and lost over 150 points to make an intraday low of 16,203. The benchmark index reversed around 80 points in the last hour and almost closed in the green. The broader market continued to underperform the index. Tuesday’s selloff in midcap and smallcap stocks was sharp and deep. The Nifty Midcap and Smallcap index managed to find support near their 50-DMA and closed off lows. On the sectoral front, Nifty IT (+0.8%) was the top gainer, while Nifty Metal (-2.5%) was the top loser.

Currently, the distribution day count stands at three, with Nifty trading at an all-time high. However, the broader markets are showing signs of weakness. We will continue to follow the action of leaders and look for constructive behavior and potential entry points to develop. If the index adds a couple of distribution days, stages a reversal, or breaches key moving averages, we may change the market status to an Uptrend Under Pressure. We continue to recommend a selective approach to increase risk. Focus on quality ideas emerging from proper bases with RS line trending higher. It is crucial to reduce exposure to stocks breaking below their 21- or 50-DMA.

Companies Announcing Results Today: Cadila Healthcare, Bata India, Creditaccess Grameen Ltd, Pidilite Industries(Nse), and others.

Key News

Guj.Alkalies & Chems.’s Q1 FY22 PAT advanced to Rs 63.1 crore from a profit of Rs 31.8 crore in Q1 FY21. Revenue grew 52.6% y/y to Rs 716.4 crore.

Zomato’s Q1 FY22 loss stood at Rs 356 crore. Adjusted revenue grew 26% q/q to Rs 1,160 crore. Further, it reported EBITDA loss of Rs 170 crore.

Galaxy Surfactants’s Q1 FY22 PAT stood at Rs 76.8 crore against a profit of Rs 56.5 crore in Q1 FY21. Revenue was up 36.7% y/y to Rs 830.9 crore. EBITDA margin contracted to 13.6% as against 15% for the corresponding period last year.

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