Where is the market headed?
There is finally some current in the market as it takes off after digesting the news of the EU deal, with only two sessions remaining before the budget. Perhaps the biggest news is the rapid fall of the dollar index, which is now near 96 levels. Although the Indian rupee is not yet strengthening against the dollar, a falling dollar index suggests that flows toward emerging markets may increase, hopefully stopping outflows from the Indian market. However, that remains only a hope for now.
One of the underlying back-burner stories is oil, which has been very steady near 62 dollars and is starting to peak above its 200-day moving average. Some experts believe that with fiat currency losing value and every asset class and commodity rising, oil will eventually join the party, making triple-digit oil possible in the near future.
Market Overview
Regarding market direction, the Nifty has avoided staying below the 200 DMA and is now above it, though it has not yet closed convincingly above a two-day high. Confidence in this rally remains tentative, but the Nifty was up 0.66% for the day. With the budget two days away, many bears and short-position holders may be lightening their positions, fearing the Finance Minister might pull a rabbit out of a hat. Since the event happens on a Sunday when volumes are low, traders prefer not to be caught in a sudden move.
Nifty Next 50
Nifty Junior showed a nice move today above the 200 DMA with a closing above the two-day high, looking much better than the Nifty.
Nifty Mid and Small Cap
Mid-caps were up 1.6%, small-caps rose 1.92%, and Bank Nifty gained 0.66%. When all three momentum trends are positive, it is generally a place of no worry for position building.
Bank Nifty
GOLD
Gold rose another 2.3% to 16513 per gram. As people become immune to the idea that gold only goes up, any future drop could cause significant trouble. It is important to stay in context, as rupee gold has seen drops of 25% to 30% in the past, though the current global setup makes a major correction seem far away.
SILVER
Silver corrected viciously two days ago but is now back near 354,000. Although silver slowed down in the last two sessions, the trends for higher ground remain intact.
Advance Decline Ratio
The advanced decline trends were strongly in favor of advances today, with 406 advances to 94 declines.
Heat Maps
Notable gainers included Bharat Electronics up 9%, ONGC up 8%, and Coal India up 5%, while Asian Paints, Maruti, and Infosys saw some selling.
In the Nifty Next 50, the heatmap was very green. CG Power had an amazing run up 9.6%, Solar Industries was up 9%, and HAL gained 6%.
Mover Of The Day
STL Tech stood out as the mover of the day, jumping 20% on the back of good results.
Sectoral Overview
Sectorally, all sectors rose except Pharma and FMCG. While consumption remained flat, the defense sector surged 6.95% as clarity emerged regarding potential orders following the EU deal. PSU stocks also ran up in expectation of budget sops. Energy, metals, and commodities all gained more than 2%.
Sector of the Day
Nifty India Defence Index
Specifically, defense stocks like Data Patterns and BEML gained between 7% and 14%.
U.S. Market
In the US markets, the Dow Jones was down while the NASDAQ and S&P were up, with stocks like General Motors gaining almost 9%.
Tweet Of The Day
The tweet of the day highlighted a mind-boggling chart of gold, which crossed three price handles—5100, 5200, and 5300—in just half a day. Such an event is rare and suggests that something in the financial system is broken. While gold investors are rejoicing, this performance may point toward an impending black swan event or a breakdown in the financial or bond markets. These signs cannot be ignored; gold does not run up like this without a reason.
