Where is the market headed?
The final days of 2025 have arrived, and the market started the week on a somewhat steady note before collapsing as the day progressed. There is a noticeable lack of momentum to sustain current levels, and the market appears to slip lower whenever a lull occurs. This indicates a slippery slope, though the movement remains largely range-bound.
One optimistic interpretation is that this is simply a holiday lullaby, and the market is essentially waiting for the new week to spark real activity. While this week might see a lack of significant movement, there is an estimate that activity will pick up by the end of the week.
A significant point of discussion today involves the ratio chart between equities and gold.
The market is reaching a junction where equities may start to look very favorable compared to gold, a trend that has repeated many times in history. It is important to clarify that this does not necessarily mean gold will stop rising. Instead, it suggests that if the chart turns at this point, equities have the potential to grow at a faster pace than gold.
Market Overview
The Nifty has now closed lower for the fourth consecutive day, losing 0.38%. During this move, the market covered a previous gap, and while it remains uncertain if the market will head lower, the 25,940 level and the 26,000 mark have been broken once again. Interestingly, the Nifty has crossed the 26,000 threshold approximately 20 times over the last 20 weeks.
Nifty Next 50
Other indices followed a similar downward trajectory, with the Nifty Junior dropping 0.47%, mid-caps falling 0.4%, and small-caps decreasing by 0.53%. There was virtually no green visible on the screen across these segments.
Nifty Mid and Small Cap
Bank Nifty
The Nifty Bank saw a more marginal decline of 0.13%, contributing to a listless and sluggish market environment that failed to find a clear direction.
GOLD
The commodities market also experienced significant pressure, with gold falling 1.09%.
SILVER
However, the most dramatic action occurred in silver over the last two sessions. After an amazing move from 220 to 240 on Friday, silver opened near 255 or 260 this morning before being completely smashed down within a single hour. This volatility is surrounded by various rumors, including potential export bans from China or issues regarding bank stability.
It is noted that several top banks hold short positions in silver and are facing margin issues. Exchanges have significantly increased margin requirements, leading to forced position liquidations for both buyers and sellers. Such violent moves, like a 10% swing over two days, often signal an intermediate top, suggesting the asset may cool off in the short to medium term.
Advance Decline Ratio
The advance-decline trend was disappointing, with 342 declines compared to only 158 advances, and the number of declining stocks grew throughout the day.
Heat Maps
The Nifty heat map was predominantly red. While Tata Steel, Asian Paints, and Tata Consumer managed some gains, there was a notable sell-off in IT, energy, and PSU stocks, along with Bharti Airtel.
The Nifty Next 50 also suffered broad losses. Commodities were hit hard, with Vedanta and Zinc seeing declines. Even IRFC, which had a strong run on Friday, was pushed down. Within that segment, only IOC and BPCL managed to trade in the green.
Mover Of The Day
In terms of individual movers, Mishra Dhatu Nigam Ltd (Midhani) stood out with a 10% gain, jumping as high as 12% during the day. This move was fueled by expectations surrounding an upcoming defense meeting where Midhani is likely to bag new orders.
Sectoral Overview
In the sectoral space, media stocks rose 0.93%, as the success of blockbuster Bollywood movies began to reflect in multiplex stock prices.
Sector of the Day
Nifty Media Index
Stocks like PVR, Nazara Tech, Sun TV, Saregama, and Tips showed upward movement.
Conversely, the FMCG, PSU bank, and oil and gas sectors remained flat, while the largest losses were seen in Capital Markets at -0.77% and Nifty IT at -0.75%.
U.S. Market
Previous sessions in the US markets were marginally down or flat. Notable stocks that continued to run included Target, Nike, UnitedHealth, 3M, and Nvidia. Within the NASDAQ 100, Nvidia, AVGO, ASML, Netflix, and Palantir moved higher, while Tesla, Meta, and MU faced downward pressure. These observations serve as a general market overview rather than specific investment recommendations.
Tweet Of The Day
Finally, there is a vital lesson in asset allocation where the traditional math of 2 + 2 does not always equal 4. Over the last four years, the CNX 200 clocked a CAGR of nearly 12%, while gold delivered a CAGR of 24%. However, by combining a CNX 200 strategy with a 20% to 25% allocation to gold and utilizing proper rebalancing, the overall portfolio outcome could have exceeded even the 24% return of gold alone. This highlights the power of momentum-based asset allocation, a concept that is often undervalued. A strategic mix can produce results far greater than the sum of its individual parts.
