Where is the market headed?
It was a good day for the markets, buoyed by several positive factors. The primary lift came from the Bihar exit polls, which suggested a probable sweep for the NDA, although exit polls are not final. This created a strong “feel good” sentiment in the market.
Secondly, some corporate results, particularly from companies like Asian Paints, surpassed market expectations, which in turn sparked renewed enthusiasm for FMCG and consumption stocks.
Thirdly, rumors of a potential US-India trade deal began circulating in the US, and IT stocks immediately took this cue and ran hard.
Finally, the new listing of the stockbroking company Groww today was a huge success, debuting with “flying colors.” These small positive news flows collectively aided the market this morning.
Market Overview
The Nifty saw a huge and sustained gap-up today. This move continued the pattern set yesterday, where the index closed at a two-day high, which is a key signal for probable continuation. The Nifty has now closed at 25,875, putting it barely a percentage or a percentage and a half away from its all-time high, indicating the index is currently in very good shape.
Nifty Next 50
While Nifty Junior made less ground, up 0.12% for the day, Mid Caps ran up 0.77% and Small Caps also broke a three-day pause to gain 0.74%.
Nifty Mid and Small Cap
Bank Nifty
The Bank Nifty almost made a new high, closing near yesterday’s close with a 0.23% gain. Overall, the market saw a reasonably broad gain across almost all sectors and sections.
GOLD
In commodities, Gold was flat today, up 0.17% at 12,450.
SILVER
Silver made further gains, rising 1.42%. Silver is now just a stone’s throw away from its previous high, and crossing that level is expected to provide a renewed tailwind for silver prices going forward.
Advance Decline Ratio
Advanced-Decline ratio strongly favored advances, with 324 advances versus 176 declines, making the market mood very clear.
Heat Maps
Looking at stock performance, the market generally moves up when Reliance leads, and today it was up 1.2%, sitting very near its highs. Other gainers included ONGC, Oil India, and the IT pack (TCS, Infosys, Wipro). There was also some recovery in the Bajaj stocks that were previously hammered. Adani Enterprise, Asian Paints, and Adani Ports were also moving up.
In the Nifty Next 50, there was more red than green overall, with some stocks like HAL, TVS Motors, Britannia, VBL, ABB, Vedanta, DLF, Chola Finance, and Bajaj Holding seeing losses. However, gains were seen in LTIM, Naukri, Solar, Hyundai, Bosch, Adani Green, ICICIGI, and Canara Bank.
Mover Of The Day
The Mover of the Day was Kirloskar Oil Engines, which jumped 15% (closing up 11.98% above the 1,000-point mark) on the back of better-than-expected quarterly results.
Sectoral Overview
In sectoral trends, the Nifty IT index saw a very strong move of +2%. This gain alone accounts for a significant portion of the sector’s 3.5% move over the last one month. The Nifty Capital Market index also moved up nicely by 1.78% and, over the last one year, it is noted as the second-best performing sector after Nifty India Defense. Other sectors saw good gains: Autos were up 1.2%, Pharma and Media both rose 1%, and Oil and Gas gained 0.8%. Real Estate lost some ground, down 0.49%, likely due to a bout of profit-taking after recent good gains. The Defense sector also took a rest, down slightly.
Sector of the Day
Nifty IT Index
The huge three-session rally in the IT space is predominantly attributed to speculation that the India-US trade deal is through. Tech Mahindra was up 3.4%, LTI Mindtree gained 3.2%, and TCS, Oracle, and Persistent all performed very well, pushing the IT services space to multi-month highs.
Nifty Capital Market Index
The Capital Market space also saw a strong rebound from its recent lows, led by BSE which was up 5% for the day. This positive sentiment is on the back of the fantastic launch and listing of Groww. Other stocks in this space, including CAMS, CDSL, 360 One WAM, and Angel One, also did very well.
U.S. Market
In US Markets, the Dow Jones did well in the previous session, although the S&P 500 was up less at 0.2%, and the Nasdaq was actually down 0.25%.
The rally was led by FedEx at +5%, followed by Merck, Pfizer, Amgen (a lot of pharma names in the top leadership), and Nike at 3.87%.
Tweet Of The Day
The Tweet of the Day segment provided an insightful look at the rapidly changing stockbroking industry. During the launch of Zerodha, no one expected the deeply entrenched players like ICICI, HDFC, Kotak, and Axis to be challenged. Zerodha, without any funding, became a market leader in under six years, disrupting the industry. This was followed by a wave of discount brokers like Angel One and Upstocks, and even entrenched players like ICICI came out with their own discount brokerage arms.
The latest player, Groww, has come out of nowhere in the last four to five years to seize market leadership, now holding a 26% market share. Zerodha is at 16.75%, Angel One at 15%, and Upstocks at 6%.
