Where is the market headed?
An extreme sell-off occurred during the last half hour of the session. This sharp cut in the final hour may have been triggered by the week’s end, month-end adjustments, or perhaps rebalancing by large institutions. While the exact numbers will be analyzed later, the downward movement is clear. This pressure is mirrored in the US markets, which is having a rub-on effect across Asia. Additionally, Foreign Institutional Investors (FIIs) recorded a significant sell-off yesterday after a long interval, making those upcoming figures critical to monitor.
A notable development involves Jack Dorsey, the original founder of Twitter and current head of the company Block. In a single email, Dorsey announced the dismissal of 4,000 employees out of a 10,000-person workforce. The primary reason attributed to this massive reduction is the efficiency of AI, with the suggestion that the remaining 6,000 staff members can manage the workload using AI tools. Interestingly, the company’s stock surged 22% following this news.
This trend is likely to reach India, where companies may see stock prices rise as they reduce their workforce or restructure through AI integration. There are two sides to this transition: the significant challenge of job losses and stalled campus recruitments, and the corporate reality of increased productivity and profitability. We may be entering a K-shaped recovery in the IT sector, where firms that downsize and focus on these efficiencies thrive while others fade away. Ironically, despite these themes, the IT sector was the top-performing winning sector in the market today.
Market Overview
The Nifty chart currently shows a negative trend across short, medium, and long-term horizons. The index has entered a previous gap and closed down 1.25%. While there was hope for a recovery as long as that gap held, the breakdown below the trend line has shaken market confidence. The index may head back to previous bottoms or attempt to stabilize mid-way.
Nifty Next 50
In contrast, Nifty Junior lost its gains from the last two days, falling 1.3%. Mid-caps lost 1%, also erasing two days of gains, yet they show more relative strength than the Nifty as they haven’t reached their gap yet. Small caps fell 1.04% but remain above their gap levels. The heavy hit to large caps suggests a significant FII sell-figure may be looming.
Nifty Mid and Small Cap
Bank Nifty
Bank Nifty fell 1.08%, influenced by concerns over the “over-ownership” of private banks. While private banking charts struggle, PSU banks have completely diverged, as they likely remain under-owned by comparison.
GOLD
Gold remained flat with a slight 0.11% dip, while silver gained 1.4%.
SILVER
Advance Decline Ratio
Heat Maps
The broader market heatmap shows “no place to hide,” with almost every sector—including banking, pharma, and autos—finishing in the red. Only IT stood out as an exception.
In the Nifty Next 50, some capital goods maintained an upward trend, but the sell-off was otherwise widespread.
Movers Of The Day
Tejas Networks surged 18% for a second straight day. Redington rose 14.6%, likely fueled by reports regarding iPhone manufacturing in India, as they serve as a contract manufacturer.
Sectoral Overview
Real estate and capital markets both dropped by approximately 2% to 2.2%. Autos, which had been performing well, saw a pre-monthly-number sell-off. Tourism, FMCG, and metals also closed lower.
Sector of the Day
Nifty Realty Index
Major players like Godrej Properties, Sobha, and others are down. There is a noticeable lull on the ground, particularly in the NCR region, suggesting a consolidation phase.
Nifty Capital Market Index
U.S. Market
In the US, while companies like Accenture and Salesforce saw gains, the NASDAQ fell 1.2% and the S&P 500 dropped 0.5%. Nvidia, despite blockbuster results, saw a 5% cut—a massive loss in value for a 3 trillion or 4 trillion dollar company. This volatility suggests the US market is on “tender hooks,” and a harder crack there would likely cause significant ripples here.
Tweet Of The Day
A critical but often overlooked metric is the global broad money supply, which is growing at a 10.4% year-on-year pace. If investments are only growing at 6% or 8%, they are effectively falling behind. This debt-driven expansion of money supply necessitates owning real assets like gold, real estate, and de-leveraged stocks. The primary goal for a prudent investor should be capital protection against “six-sigma” events through proper asset allocation rather than relying solely on equities.
