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NSE ASI rebounds as investors buy the dip

What shaped the market today?

• The NSE ASI (+22bps) turned green in today’s session, snapping its 8-day losing streak as most key sectors traded in positive territory. On the global front, Asian markets closed higher as commodity stocks gained whilst European markets traded slightly lower despite better-than-expected Eurozone purchasing managers' index (PMI) for November, which came in at 54.1, the highest since December 2015. U.S. futures pointed to a lower open ahead of the release of a slew of economic data.
• The Financial Services sector (+75bps) led gains after advances in GUARANTY (+119bps), UBA (+118bps) and ETI (+82bps). The Consumer Goods (+60bps) and Industrial Goods (+10bps) sectors also closed higher following gains across PZ (+490bps), GLAXOSMITH (+340bps), NESTLE (+125bps) and CAP (+290bps). However, the Oil & Gas sector (-122bps) continued to underperform other sectors as FO (-919bps) plunged to a fresh year low and TOTAL shed 414bps.
• Market breadth turned positive for the first time in 14 sessions with 19 advances and 11 declines.

What will shape the next trading session?

• We attribute today’s rebound to bargain hunting, especially on select bellwether stocks believed to have been oversold. We think the ASI could hold on to gains in the coming sessions.