A good day, I would think. The broader market was moving up, while the frontline market remained stable. We haven’t heard of any other coercive actions from the US side on tariffs or anything like that in the last 48 hours. So, that’s a positive for India.

Today’s detailed story is going to be focused on different sectors, identifying strengths and weaknesses within them, and understanding how they can impact our investing.

Where is the market headed?

Market Overview

After the strong run yesterday, where we climbed almost 350 points from the previous day, today was a flattish day—minus 0.18% on Nifty. Nothing wrong with that. We are still in a strong short-term intermediate uptrend, although the longer-term trend remains downward. We will need to make a higher low and then create a higher high to start moving in the direction of an uptrend. So far, we’re not there yet. Maybe surpassing 24,200, with somewhere near 24,000 being the 200-day moving average, will be key pivotal moments.

Nifty Next 50

Also, Nifty Junior was up 0.65%, so it was a decent day for Nifty Junior.

Nifty Mid and Small Cap

Nifty Midcaps were up 0.74%, though they gave up some of the gains during the day. Small caps were up a solid 1.57%, so confidence is returning to the small-cap space, although they’re not yet out of the woods.

Nifty Bank Overview

The Bank Nifty was up 0.37%, which has come back about 2,500 points from the bottom—a very nice rise.

GOLD

Overall, gold was up 1.54% today, which is amazing. We’ve crossed 85,000 on the 10 grams of Indian gold. Just at the start of the year, we were at 76,000, and within a month, we’ve already jumped to 85,000. This is how lumpy returns happen in very short periods. After that, gold prices might move sideways, but right now, I’m seeing the dollar gold price at around 2,860-2,870. I think it’s on track to hit 3,000, which is the kind of move I would love to see.

On the other hand, the rupee is breaking very hard—around 87.5—and that too is looking a bit bleak. So, both these factors put together—gold prices are looking very good. Of course, gold is slightly overbought right now, so there’s some fluff in the prices. A pullback is likely, but the trend is so strong right now. There’s also talk about delivery issues at the London Bullion Market Exchange, and if there is a physical metal delivery problem, this could really cause prices to go exponential. I hope we don’t go down that route, as it could disturb a lot of things.

Advanced Declined Ratio Trends

Momentum Trends showed a healthy advance-decline ratio of 339 to 158, so overall, a very healthy day.

Nifty Heatmap

In terms of heat maps, it was a mixed bag. ONGC, Coal India, BPCL, Bel, Adani Ports, and HDFC Bank all did well. However, not everything was positive. Stocks like Grasim, Tata Consumers, Tata Motors, and Titan lost ground today. Asian Paints, after its results, disappointed many—no gains for four years. FMCG stocks like Nestle, HUL, ITC are not performing well either.

Sectoral Overview

In terms of sectoral performance, PSU banks were dragging the market down, with State Bank leading the decline. On the flip side, the capital goods sector came back strong. Some PSBs did alright, and stocks like Indigo, HAL, and Vedanta performed well. Energy stocks, particularly JSW Energy and Adani Green, saw good gains. Capital markets were the major standout, with a 4.8% jump for the day, and BSE Limited likely performed well today after the National Stock Exchange’s unlisted stock results came out yesterday, showing better-than-expected performance.

Sectors of the Day

Nifty Capital Markets

Now, capital markets have come back strongly with a 5.4% rise in the past week. Media, public sector enterprise, oil and gas, metals, energy, PSU banks, commodities, and defense sectors all saw gains of more than 1%. Many sectors were flat, but the real losers were in the consumption space, with India’s consumption sector down 0.8% and FMCG seeing a 1.6% drop. Real estate also declined by 1.9%.

Looking at the stock movements in the capital market space, stocks like Motilal Oswal, Nippon India, Computer Age, Angel One, Nuama, and BSE all did well. The recovery in the capital market is a good sign, as it’s often a leading indicator of the overall market. When things are bad, capital markets are typically the first to fall and the first to recover, so this gives confidence that the broader market may follow suit.

Story of the Day : Where is the Strength in the Market

Yesterday, we analyzed the benchmarks, and today, we’re looking at the sectors. I’ll break down the drop from the 52-week highs for the different sectors.

• Media has dropped 29%, energy is down 28%, public sector enterprises are down 25%, and oil and gas, CPSC, and PSU banks have all seen significant drops, mostly in the range of 20-50%.
• In energy, stocks like Adani Power and ATGL Oil have dropped the most—around 50%. Even the best of the energy stocks, like Petronet and Reliance, are not performing well.
• In the public sector enterprise space, stocks like IRFC, Sail, BHEL, and Concord are down 40-45%. The least impacted stocks include Bel Power Grid, ONGC, and NTPC.
• The PSU banking sector has also been hit hard, with banks like Indian Bank, State Bank, and Bank of Baroda losing 30-35%.
• Metals have seen a 20% drop from their 52-week highs. Stocks like Hind Zinc, Copper, and Adani Enterprise are all down by 30-43%. On the other hand, stocks like JSW Steel, Vedanta, and Hindalco have fared better.
• Commodities: Adani stocks have led the decline (down 38-54%), but some stocks like UPL and SRF are hitting new highs.
• Real Estate: Stocks like Maharashtra Life, Sobha, Raymond, and Godrej Properties are down 30-41%, while others like DLF and Oberoi Reality have fared a bit better.
• FMCG: ITC, UBL, Marico, and Radico have dropped the least, whereas stocks like Hindustan Lever, Godrej Consumer, Britannia, and ITC are down 20-32%.

Where to Focus:

The key takeaway here is to focus on strength. Regardless of market conditions—whether political or economic—sticking to the strong sectors and stocks is critical. These stocks are weathering the storm better than others, and once downward pressure is released, they are more likely to go up. If other stocks recover from their lows, you can always rotate into those when the time is right.

Strength can be identified by how little a stock has fallen, so look for sectors and stocks where the damage has been minimal. Sectors that are defensive—where stocks have dropped the least—are proving to be resilient, and those are where you want to have your focus.

Portfolio Strategy:

From a portfolio perspective, it’s important to track stocks that have held up the best, as these will likely perform the best when the market improves. Even if a stock has dropped 20-30% from its 52-week highs, it may still be showing good returns from a one-year perspective. Always be ready to adapt and move into stronger stocks as market conditions change.

If you want a deeper look at your own portfolio, you can go to weekendinvesting.com for a portfolio health checkup. It will provide insights into the momentum score of your portfolio, showing you what percentage of your stocks are in high or low momentum.

WeekendInvesting launches – PortfolioMomentum Report