Where is the market headed?
With tomorrow being a trading holiday, this has not been a great month to discuss, especially as today saw another escalation in the war. Brent oil prices rose, leading to a decline across most Asian markets. Currently, the local markets are lacking specific cues and are primarily following global trends.
The RBI attempted to intervene in the Forex markets by announcing that banks will no longer be able to hold more long dollars. This triggered a sharp initial reaction with the Indian rupee gaining more than 1%, but most of those gains were lost by the evening. It appears the markets are unwilling to toe the line of the regulator, and the falling rupee remains a weakening factor for the rising import bill. As always, please read the disclaimer fully, understand it, and then move forward.
Market Overview
Regarding where the market is headed, it has now reached its lowest close since the war began, down 2.14%. Short, mid, and long-term trends are all negative, and support must be found soon to enable any future upward movement.
Nifty Next 50
The Nifty Junior fell dramatically by 2.73%. This is partly due to March year-end loss harvesting, where investors sell their losers to book losses against any gains, though gains are currently difficult to find.
Nifty Mid and Small Cap
Mid caps and small caps also faced a negative day, dropping 2.6% and 2.5% respectively, returning to levels seen earlier in the month.
Bank Nifty
The market is in an extreme oversold situation, with the banking system acting as a back-breaking force. The Nifty Bank led the decline, dropping 3.82%.
GOLD
In contrast, gold is up marginally by 0.91% and seems to be stabilizing with the potential to rise, while silver increased by 1.88%.
SILVER
Advance Decline Ratio
The advanced-decline ratios were completely in favor of declines, with only 58 advances compared to 441 declines.
Heat Maps
On this very red day, a few stocks like Reliance, Hindalco, Coal India, and ONGC were spared. However, heavyweights took a hit, with HDFC Bank down 3%, State Bank down 4%, and no relief for Kotak, Axis, or ICICI. Other previously strong performers like Bharti Airtel, UltraTech Cement, Eicher Motors, and Mahindra were also wiped out.
The Nifty Next 50 performed extremely poorly, with Bank of Baroda, PFC, DLF, IRFC, Hindustan Aeronautics, Motherson, and United Spirits all down badly. Vedanta was an exception, rising today following an announcement to split the company into five parts.
Movers Of The Day
Other movers of the day included National Aluminium, which rose 4% due to production facility damage in the UAE and Bahrain, which is expected to increase pricing power.
Renuka Sugars also saw surging demand as ethanol becomes more profitable and pricier amidst tightening global oil supplies.
Sectoral Overview
Sectoral trends were down across the board; Nifty PSU Bank fell 4.56%, Tourism dropped 3.7%, and Private Banks fell 3.5%. The only sectors somewhat spared were metals, oil and gas, central PSEs, and to an extent, energy and commodity stocks, which were down about 1%.
Sector of the Day
Nifty PSU Bank Index
The banking sector saw the most damage, with Union Bank, Punjab & Sind Bank, Bank of India, Canara Bank, and UCO Bank falling 4% to 6%.
U.S. Market
This followed a dramatic previous session in the US markets where indices fell 1.5% to 2%, and stocks like Starbucks, Citigroup, ServiceNow, Meta Platforms, and Amazon dropped 4% to 5%. Some of these stocks could be part of the Weekend Investing portfolio.
The NASDAQ 100 heat map was also extremely red, showing significant drops for Amazon, Microsoft, Meta, Google, Apple, Nvidia, and Avgo.
