Nifty has to stay above 7850 for the uptrend to continue
We had mentioned in previous week’s closing report that benchmarks Nifty and S&P BSE Sensex may remain listless; however if Nifty manages to close above 7,900 it may result in the index moving higher. On Monday itself, the 50-stock index broke this level and for three of the four trading sessions during this week, managed to close above the level. This is the third consecutive week for the NSE benchmark to close in the positive. Market now awaits the third-quarter earnings. The trends of the indices over the week’s trading are given in the table below:
On Monday, for the fifth consecutive session, Nifty managed hitting a higher high and closed near to the day’s high. Nifty closed at 7,925.15 (up 0.82% or 64.10 points). Among the major movers that day, SMS Pharma, the top gainer of S&P BSE Healthcare, rose 7.32% to close the day at Rs132. SMS Pharma received approval from the US FDA for manufacturing facility (unit 7) located at Kandivalasa village in Andhra Pradesh. Tata Steel was the top loser in the Sensex 30 pack, S&P BSE 100 and CNX Nifty 50 stock.
On Monday, we anticipated Nifty to show strength next day. The 50-stock index closed Tuesday flat at 7,928.95 (up 0.05% or 3.80 points). On Wednesday, the sideways move on the Nifty continued for most of the trading session. It finally closed in the red, thus wiping off the nearly half of the gains of past two trading sessions. Nifty closed Wednesday at 7,896.25 (down 0.41%, 32.70 points). Unwinding of long positions ahead of the derivatives expiry, coupled with profit bookings, subdued Indian equity markets on Wednesday.
On Wednesday, we mentioned that a close below 7,850 on Nifty mean that the uptrend since 15th December was over for now. On Thursday, the flat opening on the index was followed by Nifty trying to move higher. After taking support at Wednesday’s close, the benchmark finally managed to regain strength after 1pm. Nifty closed near to the day’s high at 7,946.35 (up 0.63%, 50.10 points). The index moved higher on huge volume of 105.18 crore on the NSE due to expiry of the futures and options (F&O) for December. SpiceJet Ltd rose 3.44% to Rs75.25. It was in news as the company said it has received its shareholders’ approval to raise funds worth up to Rs5,000 crore through various instruments. The company is likely to use this fund to expand its fleet. Currently, the company has some 41 planes in its fleet, including 25 Boeing 737s, 14 Bombardier Q400s and two leased Airbus 320 family. Cadila Healthcare, top loser in S&P BSE 200, fell 14.89% to Rs327.80 after the company said in a notice to BSE that it received warning letter from the US FDA for its Moraiya formulation facility and Ahmedabad API facility.