Weekend Investing Daily Byte - November 22

How are the Markets Looking ?

The Nifty remained within a range similar to the previous Thursday, with three consecutive days spent in this range. The market briefly went up beyond 19,000 but couldn’t hold that level and came down to 19,780. Although the market is currently in a wait-and-watch mode, it is neither weak nor showing signs of giving up. There is a probability of it moving higher in the future.

Nifty Heatmap

Some stocks saw dramatic losses. Coal India and ONGC dropped between three and four percent, while LTIM was down 0.6% and BPCL down 1.2%. However, several stocks remained relatively flat, including TCS, Infosys, Hindustan Levers, ITC, HCL Tech, and Maruti. Tata Motors, driven by the Tata Tech IPO, gained 1%, and Adani Enterprise saw a 2% increase. Titan quietly rose by 1.45%, while SBI Life and HDFC Life both gained nearly two and a half percent. Kotak Bank remained flat, while Bajaj Finance and Bajaj Finserv showed an upward trend after experiencing drops in the previous few days. HDFC Bank, ICICI Bank, and Reliance were also among the gainers.

Sectoral Overview

The metals sector saw the most gains, followed by real estate and pharma. Autos, commodities, and private banks also showed positive movements. On the other hand, the worst performing sectors were public sector enterprises, PSU banks, IT, and FMCG.

Over the past week, the IT sector made significant progress, achieving a 5.5% growth. Real estate has been a standout performer, with a remarkable 5.3% increase. Looking at a broader timeframe, real estate has been leading for the past one month, recording a growth of 16%. Public sector enterprises have also performed well in the same period, with a growth of 6.8%. In terms of broader ranges, comparing the past three months and twelve months, real estate continues to dominate, with growth rates of 30% and 52%, respectively. Public sector enterprises and PSUs have also performed well, with growth rates of 18.9% and 27% in the respective timeframes. Pharma stocks, which have undergone a consolidation phase since 2015, are expected to show positive traction in the future.

Mid & Small Cap Performance

Taking a look at the mid-cap and small-cap segments, mid-caps showed a silent performance, reaching an intraday new high but closing near the previous day’s close. There is no weakness evident; instead, it seems like the market is merely taking a day’s rest. Similarly, small-caps also demonstrated a similar pattern, reaching a new all-time high but closing near the previous day’s level.

Bank Nifty

Bank Nifty saw a marginal increase but is yet to make a significant upward move after the RBI regulation notification.

Stock in Focus – KPL Tech

KPIT Tech, which experienced a significant gain of 50% in the last three weeks, took a 6-7% loss today. Despite the correction, the stock seems to find support around the 1400 level. Another interesting stock is Ratan, India Enterprise, which witnessed an unprecedented gain from Rs5 to Rs70 between April and August 2021. After taking two years to digest this gain, the stock broke out today. Staying above the 70 level may indicate potential for a continued upward move.

Highlights – FMCG Sector

The FMCG sector has been stagnating for the past six months, offering virtually no gains. However, this can be viewed as a time correction following a steep rise that occurred between March and July 2021. Hence, a potential rally of continuation may be expected in the future. On the other hand, the Nifty Reality sector has been making significant moves. After consolidating for some time and attempting a breakout, the sector made a double bottom and broke out at 620 in November. Currently, it has made a successful move from 560 to 700. Nifty Metals also seems poised for a breakout, with last Thursday’s high being broken and a recent new high being established.