The market surprised sellers today with a dramatic shift in the last two hours before closing. Up until then, it was a dull day with no signs of life, but out of nowhere, there was a massive spurt in buying, or perhaps it was short-covering. Regardless of how you categorize it, the market surged, with the Nifty gaining nearly 450 points. Being an expiry day, large algorithmic firms likely took advantage of the situation, and today’s move was one of the most spectacular. While option sellers may have suffered losses, some option buyers would have made substantial gains. For instance, a ₹1 option soared to ₹200. This is the nature of the market—sometimes it plays games, but if you’re invested with a longer-term view, you don’t have to worry about these daily fluctuations. A remarkable day indeed.
The Nasdaq, driven by Nvidia and tech stocks, saw strong moves last night, which appeared to influence global markets today. China also announced a potential half-percent rate cut, and with the Fed’s rate cut meeting looming, positive sentiment built up across global markets. India, in particular, seemed to catch up in the second half of the day, helped along by the expiry theme. Let’s take a look at how the day unfolded.
Market Overview
Today, the Nifty surged by 1.89%, reaching a high before closing at 25,388, slightly lower than the peak of 25,433. This entire leg down towards the average was wiped out in four sessions, which had been looking quite dull until yesterday. The 25,000 level was a major resistance point, but the market decisively broke through, hitting a new all-time high.
Nifty Next 50
Nifty Junior also performed well, climbing 1.47%, also close to an all-time high.
Nifty Mid and Small Cap
The Mid Cap index hit a new all-time high with a gain of 1.14%, and Small Caps, though still in a congestion zone, rose by 0.78%.
Nifty Bank Overview
Bank Nifty also saw a strong move, rising 1.49%, as it broke through a pivotal top, suggesting better days ahead for the banking sector.
Advanced Declined Ratio Trends
The market’s sentiment has shifted rapidly. As I’ve always said, if you have a plan, execute it. Markets rarely give you time to think, and if you try to time it, you may miss out. Advances far outnumbered declines today, with 388 advances against just 111 declines. FII buying continued for a third straight session, which added to the positive momentum, while DIIs have muted their purchases. Despite the strong rally, many were expecting a significant downside, particularly due to narratives around the Bajaj IPO sucking ₹3 lakh crore from the market. But the market denied those predictions, showing that narratives can often be built on imagination.
Nifty Heatmap
The heat map was overwhelmingly green today. Bharti led with a 4.3% gain, followed by ONGC, Coal India, and Bajaj Auto. Infosys, SBI, and L&T also posted strong gains, and even Reliance gained 1.9%. In contrast, the Nifty Next 50 was less impressive, with D-Mart dropping 1.4%, but most other stocks held firm.
Sectoral Overview
Sector-wise, metals led the charge, up 2.9%, followed by infra and commodities, which reversed the recent risk-off trend. Whether this is a one-day spurt or the beginning of a longer move remains to be seen, but it was a very positive session overall.
For the week, public sector stocks are still in the red, as are commodities, autos, and energy. But with today’s recovery, they may turn around soon.
Sectors of the Day
Nifty Metal Index
Metals, which have struggled since the elections, could see a new leg up, with stocks like Nalco, Hindalco, and NMDC performing well.
Stocks of the Day
Kaynes Tech
Story of the Day
Now, on to today’s topic: the hidden dangers of the IPO lottery game, particularly in the SME segment. A recent example is the Resourceful Automobiles IPO, which raised ₹12 crore but saw subscription demand of over ₹4,800 crore. Despite overwhelming interest, the stock hit an upper circuit on day one and then collapsed to ₹79. This shows the speculative nature of these IPOs, where most participants are gamblers, not investors.
The SME IPO game is a lottery. People are willing to block their money in hopes of getting an allotment, knowing they lose nothing if they don’t. It creates a no-loss, huge-win scenario. But remember, true wealth is built over time. Chasing overnight gains doesn’t lead to meaningful wealth, which is why most people never accumulate significant wealth—they focus too much on quick wins instead of building long-term strategies.
Warren Buffett, for example, never achieved 50% compound annual growth rates. His success comes from compounding over the long term, even at lower double-digit returns. This is the key to wealth creation, and chasing IPOs or quick market moves is not the way to achieve that.
