SGX Nifty Indicates Muted Opening; Maruti Records Increased Production in November

Market status:  Confirmed Uptrend

Distribution Day: Two

Global stock markets: Dow30, +0.8%; S&P500, +0.9%; Nasdaq, +0.7%; Nikkei, -0.3%; Kospi, -0.6%; Hang Seng, -1.5%

Nifty closed in positive territory on all four sessions of the last week. It made a new high on Friday and closed in the top quartile of the day’s range. Friday’s gain was led by Nifty Bank (+2%). Also, Nifty Metal (+1.2%), Pharma (+1.2%), and FMCG (+1.4%) pushed Nifty higher. Nifty Midcap and Smallcap indices took a breather and underperformed the benchmark indices. Nifty is trading 3.5% and 9.5% above its 21- and 50-DMA, respectively. On the sectoral front, Nifty PSU Bank, Realty, and Metal closed 8–9% higher for the week. Nifty Auto, Energy, and Pharma closed 4–5% higher, while Nifty IT and FMCG also gained 2.5% and 2.0%, respectively.

We maintain a positive view of the overall market as indices trend into new highs with low distribution day count. Further, leadership remains widespread across multiple sectors. We continue to recommend a selective approach to increasing risk. Focus on high-quality ideas emerging from sound bases with an RS line at or near a new high. After a strong rally, pullback/consolidation (if any) is a constructive sign if Nifty holds its short-term moving averages. On the flip side, tracking distribution days is crucial. Accumulation of distribution days can be a sign of market top and halt the uptrend.

Key News

India imported 117MT coal during April-October this fiscal, a decline of 19% from the corresponding period last year..

Nhpc said it will commission the 2,000MW Subansiri hydropower project by March 2022. The project has been facing hurdles due to intense protests in Assam.

Maruti Suzuki India production for November increased 5.9% y/y to 1,50,221 units.

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, 92%; Rally Attempt, 0%; Uptrend Under Pressure, 8%; Dowtrend, 0%.

For the 24 developed markets tracked by our institutional research team, the market status breakdown is as follows: Confirmed Uptrend, 92%; Rally Attempt, 0%; Uptrend Under Pressure, 8%; Downtrend, 0%.

Buy watchlist: Heidelbergcement India, Polyplex, Subros, Berger Paints India, Polycab India,  Balaji Amines Limited, Icici Lombard General Ins Co,  Balrampur Chini Mls(Nse), Coromandel International, Tata Consumer Products, and Whirlpool Of India (Nse)

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