The 15,550-15,950 Nifty range, which held throughout July, is likely to be broken in August. Even though FIIs have been pressing sales at the upper end of the band (they sold stocks worth Rs 1,540 crore yesterday also), the market momentum is not in their favour now, said an analyst.
“Fundamental support to the bulls has been coming from good corporate results. Now the macros are turning very positive with the declining fiscal deficit, rising tax collections, and the excellent performance in exports, which shot up 48 per cent in July. The PMI at 55.3 indicates a potential sharp turnaround in economic activity,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
How are the bluechips doing?
After opening in the green, benchmark indices dipped a bit lower. At 9.30 am, BSE flagship Sensex was up 181 points or 0.34 per cent to 53,131. NSE benchmark Nifty advanced 38 points or 0.24 per cent to 15,923.
“The bulls seem to be losing ground as this is the seventh attempt to cross the 15,800-16,000 zone but are clutching at straws to conquer it. We had a gap-up opening on the first day of the month, but still bulls didn’t manage to capitalize it to cross the hurdle and formed a hanging man candlestick pattern on daily charts. The negate level for this theory is 16,057. If bulls fail to cross this by 4 August (±2 trading days), the reversal cannot be ruled out,” said Brijesh Bhatia, Senior Research Analyst, Equitymaster.
In the 50-share pack Nifty, Titan was the biggest gainer, up 2.60 per cent. , Power Grid, HDFC, Tata Motors, Britannia, Adani Ports, Bajaj Finserv, TCS and IndusInd Bank were among other gainers.
was the top loser in the pack, down 1.81 per cent. JSW Steel, HCL Tech, Bajaj Auto, ONGC, HDFC Life Insurance, Coal India, , ICICI Bank and Reliance Industries were other losers in the pack.
FACTORS DRIVING MARKETS
Good news
Yields fall further: Equity valuations elsewhere have already been supported by a steady decline in bond yields. The benchmark 10-year Treasury yield was down 5.5 basis points at 1.1839 per cent, extending a pattern of declines playing out since the spring.
PMI expands: The IHS Markit India Manufacturing Purchasing Managers’ Index stood at 55.3 in July compared with 48.1 in June, according to a media statement. That’s the fastest pace of growth in three months. A reading above 50 indicates economic expansion.
Bad news
Fed to start tapering?: US Federal Reserve Governor Christopher Waller on Monday said the central bank could start to reduce its support for the economy by October if the next two monthly jobs reports each show employment rising by 800,000 to 1 million, as he expects.
Virus scare: In China, the Delta variant spread from the mainland’s coast to its inland cities, prompting authorities to implement strict counter epidemic measures to bring the outbreak under control.
Broader markets
Broader market indices were trading higher but underperformed their headline peers. Nifty Smallcap was up 0.13 per cent, while Nifty Midcap climbed 0.13 per cent. Broadest index on NSE, Nifty 500 was up 0.33 per cent.
Alkyl Amines, UTI AMC, Kalpataru Power, Bharat Forge, Deepak Nitrite and Bata India were gainers from the space while PI Industries, Dalmia Bharat, RBL Bank, Trident, PVR and Carborundum Universal were under selling pressure.
Global markets
In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.40 per cent. Japan’s Nikkei was off 0.85 per cent in early trade. China’s blue chip index CSI300 shed 0.80 per cent while Hong Kong’s Hang Seng Index fell 0.83 per cent.
Australia’s benchmark index, the S&P/ASX200 is off 0.25 per cent, having reached a record on Monday after Square Inc announced a $29 billion offer for buy-now-pay-later firm Afterpay Ltd.
