Where is the market headed?
Recent developments at the Davos World Economic Forum have significantly influenced market sentiment. President Trump’s statement regarding Greenland, clarifying that force will not be used to acquire the territory and that a deal will be pursued, has helped cool market anxieties.
Following this news, precious metals softened while global markets rallied. Locally, the market experienced a substantial run-up in the morning; however, much of those gains were surrendered by the close. This indicates that investors remain cautious and are not yet convinced that current global tensions have fully calmed.
Despite this, Thursday, 22nd January, provided a welcome recovery bounce. While it is too early to declare a definitive change in the downward trend, the day’s performance was a positive shift from recent volatility.
A major point of discussion over the last few days has been the unusual behavior of Gold and Silver ETFs. Since Tuesday afternoon, these ETFs surged into a significant premium relative to the underlying metals.
While the metals themselves remained relatively stable, some parties pushed ETF prices to extreme levels, drawing in retail investors before positions were dumped. Consequently, those who bought into these premiums have seen losses of up to 10%, even though the underlying metal prices only shifted by about 1%.
Market Overview
The technical charts show that after a “doji” day, the market managed a bounce, closing 0.53% higher. While the short and mid-term trends remain downward, closing above the recent high of 25,435 could signal a potential run-up leading into the budget.
Nifty Next 50
Nifty Junior and Mid-caps also saw gains of over 1%, though they remain in downtrends.
Nifty Mid and Small Cap
Bank Nifty
In contrast, Bank Nifty rose 0.68% and continues to show long-term strength, maintaining its position at the top end of its range despite broader market weakness.
GOLD
In the commodity space, Gold remains in a positive long-term trend at 15,056 per gram, despite recent chatter about a market top.
SILVER
Silver reached a new calculated all-time high of 293,291, up 1.13%.
Advance Decline Ratio
Overall market breadth was decent, with 387 advances to 113 declines.
Heat Maps
In corporate news, Zomato fell 2.68% following the news of Deepinder Goyal stepping down from Eternal. While some view this with concern, his track record as an entrepreneur suggests he has likely stabilized the foundation before his departure. Other notable performers included Tata Steel, Bajaj Auto, and various public sector stocks, while ITC remains near the 320–325 mark, consistent with previously discussed patterns.
Mover Of The Day
Sectoral Overview
The real estate sector is currently facing a tricky period, having lost 11.6% in the last month. While some may see this as a sign of a bubble bursting, it is important to remember that the sector has gained several hundred percent in recent years; a lull is a natural part of any investment cycle.
On the positive side, the Defense sector led gains with a 2.6% rise, followed by strong bounces in Media, PSU Banks, and Pharma. Specifically, Bajaj Consumer surprised the market with a 20% gain following a Q3 net profit jump of 83%.
Sector of the Day
Nifty India Defence Index
U.S. Market
In the US, markets rallied on the back of the Greenland news, with Intel climbing 11.72% and AMD rising 7.7%. Major indices like the S&P 500, Dow Jones, and Nasdaq all gained more than 1%, supported by tech giants like Nvidia and Tesla.
These global movements continue to provide a backdrop for domestic strategies. For those interested in structured approaches, information regarding model portfolio subscriptions and various investing strategies is available for review.
Tweet Of The Day
A poignant takeaway from the World Economic Forum came from Geeta Gopinath of the IMF, who suggested that India should prioritize addressing pollution over worrying about trade tariffs. She highlighted a World Health Report indicating that 18% of deaths are linked to pollution, a factor that actively deters top global professionals and manufacturing investments from moving to India. This shifts the conversation from viewing pollution solely as a health crisis to recognizing it as a significant drag on GDP growth.
