Where is the market headed?
The key action today wasn’t in the equity markets, which had a relatively dull session, but in precious metals, which were booming. Silver is truly on fire, hitting new all-time highs in the Comex, Shanghai, and Indian rupee markets, exceeding ₹1,64,000 per kilogram. Gold is also nearing its previous all-time high, up 0.37% to ₹12,703 per gram, climbing close to its earlier peak of ₹13,000 or ₹13,100. This surge is setting the stage for the upcoming Fed meet in December, where markets widely anticipate rate cuts.
Market Overview
After the massive run-up on Wednesday, the equity market has been extremely quiet for two consecutive days. Thursday was quiet, and Friday was an inside day, a technical term used when the entire trading range of the current day falls within the range of the previous session, essentially making today’s candle engulfed by yesterday’s. An inside day signals a short-term indecisive day.
Despite this, the market remains in a shorter-term uptrend. The major indices were flat to slightly down: Nifty was down -0.05%.
Nifty Next 50
Nifty Junior was very flat at 0.1%, Mid-caps were down 0.11%, and Small-caps dipped 0.22%, showing a deviation from the large-cap space as they are still reasonably far from their all-time highs.
Nifty Mid and Small Cap
Bank Nifty
Nifty Bank was also very flat at 0.03%, making it feel almost like the market was on a holiday.
GOLD
SILVER
The primary focus remains on silver, which has hit a new all-time high in rupee terms, surpassing ₹1,64,000 per kilogram. In US dollar terms, it’s also performing very well, registering a new weekly high close at nearly 54, with the Shanghai market reportedly reaching 55 or 56. There was an unusual stoppage in silver futures trading at the Comex this morning, attributed to a very unusual cooling tower failure at the exchange. Everyone hopes this doesn’t lead to a market disruption over the weekend, and more information will be available on Monday morning.
Advance Decline Ratio
The Advanced Decline ratio was dull and flat, with 192 advances to 308 declines for the entire day, indicating an extremely flat and non-directional session.
Heat Maps
On the Nifty heat map, losses were seen in finance companies like Shriram Finance, life insurance companies such as HDFC Life and SBI Life, IT stocks like Infosys and HCL Tech, and energy/power stocks including ONGC, Coal India, L&T, BEL, and Power Grid. Gains were concentrated in Auto stocks (Mahindra & Mahindra, TVS Motors) and the Pharma space (Dr. Reddy’s and Sun Pharma), with State Bank and Kotak Bank also up slightly.
The Nifty Next 50 heat map showed more volatility, featuring both brighter green and deeper red. Gas Authority lost 4%, with further losses in other energy and gas stocks like IOC and BPCL, which are getting thrashed. However, Bajaj Housing went up 2%, and Adani stocks (Adani Green, Adani Enterprise, and Enrin) were up. Vedanta, Hindustan Zinc, Varun Beverages, HAL, and LTIM also posted gains.
Mover Of The Day
In the Mover of the Day segment, Wellspun Living saw the biggest jump with significant volume and price action, forming a rounding bottom pattern and gaining new ground on the higher side.
Sectoral Overview
Sectors were evenly divided. The few sectors that gained more than half a percent were Nifty Media, Nifty Pharma, and Nifty Auto, with Autos hitting a recent new closing high, led by Mahindra & Mahindra at 2%, Exide, Eicher, Bajaj Auto, and Sona BLW. Sectors that lost ground included Nifty Energy, CPSE (Public Sector Enterprise), Oil & Gas, and Capital Market (down 0.69%), with MCX, Angel One, IEX, BSE, and KFinTech leading the capital market stocks down.
Sector of the Day
Nifty Auto Index
Nifty Capital Market Index
U.S. Market
Looking at the US markets‘ previous session, the indices had a very good week, with S&P 500 up about 3% weekly, NASDAQ at 4.2%, and the Russell 2000 (the broader market index) leaping up 4.9%. However, over the last month, the NASDAQ has lost 2.57%. Annually, the NASDAQ has performed well at 21% and the S&P 500 at 12.93%, though a significant part of these gains is concentrated in a few large-cap stocks. In contrast, the Russell 2000 is up only 2% for the entire year, underscoring the narrowness of the US market rally.
Tweet Of The Day
The “tweets of the day” segment provided two important charts. The first highlighted that the Gold USD chart now shows four consecutive monthly bullish candles. Historically, finding five consecutive months of considerable gains is a rare occurrence, having happened only one or two times over the last 20-30 years. December will be an acid test to see if gold can break this record, and so far, it appears poised to go higher.
The second tweet focused on the long-term chart of the USD/Japanese Yen (USDJPY). The pair used to trade around 150 to 160 in the 1980s, collapsed to 80, and has since climbed back to 156. With the Japanese economy adding stimulus and their yields going up, more investors are expected to unwind their carry trade, putting pressure on the Japanese Yen.
It is expected that once current levels are broken, this could put significant pressure on all Asian currencies, including the Rupee. Watching the breakout on the USDJPY chart is crucial. For more details on the Japanese situation, you can check the link to a recently released and well-received video in the description.
