How are the Markets Looking ?
It was a good day for Nifty overall, with strong signs of recovery. However, the banking sector underperformed, leading to a slight dampening of the market’s overall strength.
The day started with a positive note as markets opened with a gap on the upside. Markets opened with a gap, Nifty almost touched the 21400 levels before experiencing a correction. It fell approximately 150 points but managed to recover and close at around 21349. This strong pull back indicate the strength of the market and a potential for a new all-time high in the near future.
Nifty Heatmap
Moving on to the heat map, we can see a contrasting image. The left side of the map shows a majority of red, indicating the fall in banking stocks. On the other hand, the right side shows a predominance of green, signifying the positive performance of other sectors. Reliance remained neutral at about 0.1%, while banks like ICICI Bank, SBI, and Bajaj Finance experienced losses ranging from 1% to 0.94%. On the other hand, stocks like Kotak and Bajaj Finserv showed gains.
Among the gainers, the IT sector performed exceptionally well, outperforming Nifty as well. Infosys saw a 1.75% increase, while Wipro and HCL Tech stood out with gains of 6.6% and 2.68%, respectively. These stocks will be our focus for today’s analysis as we compare their performance with the IT index.
Sectoral Overview
In the sectoral overview, real estate and IT performed well, with gains of 2.6% and 2.3% respectively. Metal, auto, and pharma sectors also showed positive gains in the range of 1% to 1.7%. Real estate, which had seen a strong beating in the previous few sessions, managed to recover with a loss of only 0.5% on a weekly basis despite being down 7% from the peak, indicating a good recovery for the sector overall. PSE stocks were at the second position followed by Energy when we look at the 3 month performance.
Mid & Small Cap Performance
Mid-caps and small-caps both showed decent follow-ups to yesterday’s performance, very strong recovery. Small-caps had a slightly better candle compared to mid-caps, indicating strong momentum in that segment. The recovery in small-caps has been ferocious, and it is possible that a new all-time high may be achieved soon.
Bank Nifty Overview
Analysing the bank Nifty chart, there seems to be some consolidation happening at this zone after a substantial rally. The consolidation is expected after such a ferocious upward movement from 42,000 levels to almost 48,200 levels. There is no need for excessive worry as this consolidation is par for the course.
Stocks in Focus – WIPRO & HCL TECH
Wipro has experienced a breakout after a long consolidation phase since July 2022. Breakouts after such phases often result in strong momentum and upward trajectory for the stock. Wipro had a lead compared to the IT index during the post COVID rally phase but suffered a bigger fall during the correction phase in IT index
HCL TECH has been the strongest stock in IT index. This stock hit a new ATH around Oct 2023 while the benchmark is still in the recovery phase.
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