The markets are still defying the conventional thought process. Normally, if the US markets fall overnight, we expect to follow—but that didn’t happen this time. Despite a move down, markets remained in fine fettle.

Last night (21st Monday), the US markets fell heavily, with several key stocks down 3% to 5%. The Nasdaq and S&P 500 dropped a couple of percentage points, and things don’t look great for the US markets currently. They are hovering near previous breakdown points, while we in India are witnessing the completely opposite trend. The last eight sessions have seen an impressive up-move—so far, so good.

Sectors are rotating post the recent bottom, and we’ll dive deep into which sectors are performing well in this sharp bounce. This sectoral rotation will be explored in the second half of this blog.

Where is the market headed?

Market Overview

Looking at the Nifty index, it remained absolutely flat at 0.17%—an impressive outcome considering global pressure, especially with US markets turning down. The dollar index is coming down, US yields remain strong, and money appears to be flowing into emerging markets, which is benefiting India.

The 23,800 resistance level has broken out and may get retested, but we remain in a safe zone above that level.

Nifty Next 50

The Nifty Junior gained 0.22%, a decent day overall.

Nifty Mid and Small Cap

Mid caps outperformed, rising 0.85%, small caps also gained 0.8%. We’ve now recovered everything since the February decline.

Bank Nifty

Bank Nifty added 0.62%, making it the best performer among all indices.

GOLD

Gold continues to rally hard, crossing ₹10,000 per gram or ₹1 lakh per 10 grams, with prices in dollar terms hitting $3,500. The move from ₹85,000 to current levels in just eight sessions is mind-boggling and a sign of global shifts. These kinds of moves aren’t random—we’ll soon understand the reasons behind them.

Advance Decline Ratio

Market breadth was reasonable with 309 advances versus 191 declines.

Heat Maps

The heat map showed a mixed bag: Infosys and Wipro followed US stocks down, while HDFC Bank propped up the market. Reliance was flat, Bharti Airtel and ONGC were down, whereas Hindustan Lever and ITC were in the green.

In the Nifty Next 50, DMart, United Spirits, Canara Bank, and Lodha were up. Chola Finance was down 5%, JSW Energy fell, and others were flat.

Sectoral Overview

Real estate soared 2.4%, showing strength. In fact, a tweet I shared recently calculated that gold has doubled over the past three years. With India holding 25,000 tons, the value has risen by ₹125 trillion—to put it in perspective, the entire yearly SIP inflow is ₹3 trillion. This wealth generation is spilling into real estate and equities.

The wealth effect is very strong right now in India, and the losses from the September to February phase may be easily offset.

Real estate is robust, with no slowdown in launches or pricing, according to ground reports.

FMCG gained 1.9% after a long sideways move. Capital markets are up 7.8% in a week, real estate 6%, and PSU banks 7.4%.

Sectors of the Day

Nifty Realty Index

The move is broad-based and real estate stocks like Phoenix Mills, Prestige, Raymond, and Oberoi Realty have done very well.

Story of the Day : Sector Rotation After the Recent Bottom

We’re calling the recent April 7 bottom a bottom for now. Between September-end to April 7, CNX 500 lost 20%. Here’s how sectors behaved during that correction:

• Industrial services fell 40%, manufacturing producers 31%, consumer non-durables 25%, utilities 32%, and retail trade 40%.
• Notable stock drops included FirstCry down 57%, SW Solar down 67%, PAR down 56%, and Renuka 50%.
• Health services stood out with only an 8% drop, Narayan Hrudayalaya was up 15% even during this fall.

Stock-level outperformance was rare, e.g., only 1 of 13 industrial services stocks outperformed.

In finance, 39 of 100 stocks outperformed. JSW Holdings gained 160%, Chambal Fertilizer rose 12%, and non-energy minerals were up 12%.

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Post-Correction Recovery

In the last eight or nine sessions, CNX 500 jumped 12.6%. Top sectors in this phase include:

• Electronic Technologies surged 24%, with Keynes up 51% and 94% of stocks outperforming.
• Industrial and Distribution Services saw Techno and Redington up 47% and 29%, respectively.
• Finance and Tech Services also performed well: Chola Holding up 38%, KFinTech 45%.
• Health Services climbed 17%, with Vijaya Diagnostic up 35%.

Top performing stocks: Keynes, Techno, KFinTech, Gravita, Data Patterns—each delivering 31% to 51% gains.

Even the bottom 20 stocks remained flat, showing no major negative outliers in this phase.

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Correction vs Recovery Analysis

Some sector dynamics:

• Retail trade fell 40%, recovered 14%, with 60% stocks outperforming now.
• Electronic Technology fell 28%, rebounded 24% with 94% outperforming—exceptional recovery.
• Utilities dropped 32%, now up 16%, with 83% of stocks beating the index.
• Distribution services down 27%, rebounded 20%, with 83% now outperforming.
• Energy & minerals lost 31%, recovered 16%, with 80% outperformers.

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Sector Classifications Based on Rotation

Sectors that underperformed during correction but are now leading:

• Utilities
• Industrial Services
• Distribution Services
• Energy & Minerals

Sectors that held up during the correction but are now lagging:

• Health Services
• Consumer Non-Durables
• Health Technology

Sectors that lagged in both phases:

• Commercial Services
• Retail Trade
• Tech Services
• Consumer Services

Sectors that did well in both phases:

• Electronic Technology
• Finance

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Insights and Takeaways

During the correction, health-focused sectors were the safe zones, with health services falling just 8% and 82% of stocks outperforming CNX 500. Defensive sectors like health tech also held up well.

Finance showed resilience, with 39% stocks outperforming. Consumer non-durables and services had 35-36% outperformers, showing defensive bias.

Tech underperformed badly, with only 13% of tech services stocks outperforming. Electronic tech also struggled, down 28%.

Cyclicals and industrials were hit hardest—retail trade, industrial services, utilities, and commercial services saw no stock beating CNX 500.

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Current Uptrend Leaders

Now, electronic technology leads with 24% average return, 94% of stocks beating CNX 500—a rare blend of alpha and breadth. Keynes is up 51% in just this short recovery.

Other top sectors:

• Distribution Services: +20%, 83% outperforming
• Industrial Services: +21%, 73% outperforming
• Utilities & Energy Minerals: +16%, with 83% outperforming
• Finance, Consumer Durables, and Transportation: Modest gains, but strong breadth

Health Services have cooled off, with profit booking happening as money rotates to high-beta areas.

Consumer Durables and Commercial Services continue to lag, offering no strong revival signals.

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This is a classic example of how the internals of the market rotate silently. Self-correcting strategies should follow these cues and gradually shift into newer leading sectors.

While we can’t say for sure if these leading sectors will continue to dominate, the signals are very clear for now. The question is—what are your thoughts on this rotation post the bottom?

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