How are the Markets Looking ?
Today, we witnessed the market starting on a tepid note but gradually gaining momentum throughout the day. The highlight of the day was the market surpassing the 19,870 mark and closing at a new recent high of 19,889, bringing us within just 110 points of the highly anticipated 20,000 mark once again. We might see the retest of the previously failed breakout at the 20,000 mark
Nifty Heatmap
The day saw significant advances in various subsegments of the market. Adani stocks were particularly impressive, with Adani Enterprise surging almost 9%, Adani Ports rising by 5.3%, and other Adani stocks, including Adani Greens and Adani Total Gas, also experiencing substantial jumps. The positive momentum in the Adani group can be attributed to the Supreme Court’s decision to not find any material evidence against them.
Additionally, the energy and petroleum sector stocks, such as ONGC, Coal India, and BPCL, enjoyed a bullish run. Cement stocks, like UltraTech Cement and Grasim, also witnessed an upward trend. The main move was seen in Commodities. However, IT stocks remained muted. Additionally, HDFC Bank, State Bank of India, ICICI Bank, and Kotak Bank showing minimal movement. On the other hand, Tata Motors performed well, gaining 3.5%. Titan and Bajaj Auto also made notable gains, as indicated on the sectoral map.
Sectoral Overview
The energy sector experienced a significant surge of 2.4%, accompanied by impressive leaps in commodities and metals, both at 1.9%. This upward movement fosters a positive outlook for these sectors, hinting at new highs to come.
Speaking of new highs, public sector enterprise stocks rose by 1.8%, while public sector banks, infra stocks, and auto stocks surpassed the 1% mark. Overall, it was a remarkable day as the market successfully erased minor losses across most sectors.
While the majority of sectors experienced positive growth, the IT and pharma sectors faced minor losses for the week. Pharma stocks, in particular, closed down by 3.3%, while FMCG closed with a modest decrease of 0.2% over the past twelve months.
Real estate stocks have been on an upward trajectory and are approaching nearly 50% gains. Public sector enterprise stocks have also made substantial progress, currently standing at 34-38.4%, while pharma stocks show promising growth at 26.2%.
Mid & Small Cap Performance
Mid-cap stocks continue their impressive performance, reaching an all-time high of 4,278. This sustained upward trend is a testament to their growth potential.
In line with mid-cap stocks, small-cap stocks also hit a new high, although they closed near yesterday’s levels. However, the increase represents a significant milestone as they have surged from 11,500 to over 13,000 within just a month or so.
Bank Nifty Overview
Bank Nifty has shown positive signs as it strives to enter the gap created on the day of the RBI notification. The past three days have been consistently positive.
Highlights
Looking at specific sectors, Nifty Energy soared towards 29,252, marking a new high for the index. Nifty Commodities also broke through the 6,680 barrier and is now heading towards 6,800. Nifty Metals witnessed a significant surge after crossing its trend line, indicating favorable market conditions ahead.
Tailwinds witnessed in the Market
Currently, the market seems to have a huge tailwind, supported by buying from foreign institutional investors (FIIs) and robust domestic fund flow. Furthermore, with the interest rate cycle potentially topping out, a rate cut in 2024 could be on the horizon. These factors contribute to an overall positive outlook for the market.
Potential Headwinds
Despite the favourable market conditions, we must keep an eye on potential headwinds that could arise due to political equations. The by-election results in the coming weeks and the quarterly results in January may affect market dynamics, especially for companies that have experienced significant growth and are potentially overvalued from a fundamental perspective.
If you have any questions, please write to support@weekendinvesting.com
