Asian Markets Trade Higher; GIC to Invest Rs 5,512 Crore into Reliance Retail

Last week, Nifty was in positive momentum and advanced 3.3%, reclaiming its 21-and 50-DMA. On Tuesday, we changed the market status to a Rally Attempt as September 25 was a blue rally day (Day 1) and Nifty managed to stay above its Day 1 low for two consecutive sessions. On Thursday, the momentum was very good, led by Banking stocks, and Nifty closed 1.5% higher. However, since volume was lower compared with yesterday’s session, we will not consider today’s session as a follow-through day. On the sectoral front, all the indices closed in the green for the week. Nifty Bank (6%) and Financial Services (+5.9%) were the top performers. On Friday, U.S. markets opened lower on news that President Trump was tested positive for COVID-19. However, smart recovery was seen and U.S markets closed off-lows.

Looking forward, we would prefer to see a follow-through day before shifting the market to a Confirmed Uptrend. A follow-through day is a solid up session, generally a 1.5% or higher gain, with volume being higher than the previous day. Should this occur, the focus will be on ideas that show the best relative strength with good accumulation. Stocks that recover the quickest tend to lead the next run. On the flip side, if Nifty breaches its recent low of 10,790, the market will be moved back to a Downtrend.

Key News

Reliance Industries announced that GIC will invest Rs 5,512.5 crore into Reliance Retail Ventures Ltd., while global investment firm TPG will invest Rs 1,837.5 crore.  

Route Mobile completed the acquisition of software and associated identified customer contracts of TeleDNA Communications on a slump sale basis.

Tata Motors’s September sales grew 37% y/y to 44,444 units.

Hero Motocorp’s September sales grew 17% y/y to 7,15,718 units.

Dr. Reddy's Laboratories launched a generic version of Sapropterin Dihydrochloride tablets in the U.S. market. It is used to bring down blood phenylalanine (Phe) levels.

O’Neil Market Condition Report

For the 24 emerging markets tracked by our institutional research team, the market status breakdown is as follows: Confirmed Uptrend, 15%; Rally Attempt, 10%; Uptrend Under Pressure, 50%; Downtrend, 25%.

For the 24 developed markets tracked by our institutional research team, the market status breakdown is as follows: Confirmed Uptrend, 20%; Rally Attempt, 5%; Uptrend Under Pressure, 65%; Downtrend, 10%.

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