Stock Market Update: Nifty succumbed to profit booking & ended flat

Today’s Action

Nifty, -0.1%; Sensex, +0.2%; Nifty Midcap, +0.5%; Nifty Smallcap, +0.4%; Model Portfolio, -1.4%

Market Pulse Confirmed Uptrend

After opening more than 100 points higher, Nifty succumbed to profit booking and ended flat. It was a highly volatile trading session. Only 28% of Nifty50 stocks advanced today, led by Tata Motors (+4.7%) and Sun Pharm.Industries (+3.6%). On the flip side, Hindalco Industries (-6.2%) and Jsw Steel (-5.5%) were the major decliners.

On the sectoral front, it was a mixed reaction. Nifty PSU Bank (+4.2%) and IT (+1.6%) were the major advancers. On the other side, Nifty Metal (-3.3%) and FMCG (-2.1%) were the major decliners. Of 2,125 stocks traded, 1,150 advanced, 683 declined, and the remaining traded flat.

We continue to be very selective about taking any fresh positions. It is important that investors don’t play all their cards at once. We would suggest adopting an investment approach where you begin with a small allocation and increase it as and when the market advances further.

Without trying to predict and decode stories, we will take what the market gives us and continue to monitor unfolding conditions. Stocks with higher relative strength and superior fundamentals can do well. Some leading stocks have sharply corrected. Wait for them to put in at least a short period of consolidation and show a constructive breakout from that range. Buying without this period of constructive behavior into a straight upmove off the bottom, puts you at a risk of drawdown.

Key News

DGCA has ordered airlines not to take bookings from May 4 as the final decision is awaited. Shares of Interglobe Aviation (-6%) and Spicejet (-1.7%) have declined sharply.

Fitch has downgraded India’s economic growth forecast for FY21 to 1.8% from 4.6% previously.

Wockhardt received the Qualified Infectious Disease Product (QIDP) designation for its novel antibiotic WCK 6777 from the USFDA.

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