Where is the market headed?
It is a good start to the new financial year, and there has been some talk of de-escalation recently. News reports indicate that President Trump and Marco Rubio are calling off the war in a few weeks, though whether one should believe their word or not remains to be seen as the attacks are still continuing. However, crude oil has come off, and that is the leading indicator of escalation or de-escalation of this war. With crude oil coming off, Asian markets have gone up and gold is going up. There is certainly an air of optimism at the start of the new year, which is extremely good.
Market Overview
The Nifty chart did not break out as such yet, but it was up 1.5%. We are still in a short, mid, and long-term negative trend, but nevertheless, it was a good jump today. It did give up some of the gains from the morning, as the Nifty hit a high of 22941 but closed at 22679. This means we lost about 250 points from the top, but a pause in this range will be acceptable as of now because we just need to stop falling at some point.
Nifty Next 50
Nifty Junior was more resilient, finishing plus 2.59%.
Nifty Mid and Small Cap
Mid-caps were up 2.2% and small-caps were up 3.22%. Small-caps are showing much more relative strength than other parts of the market, which is certainly a positive sign that the broader market is behaving in a relatively stronger way than the large-caps.
Bank Nifty
Nifty Bank was up 2.33%, showing a nice jump after the smash down on the previous session.
GOLD
Gold is up 1%. Gold seems to be moving up, suggesting the worst possibly could be behind us for now, and a potential rise to the previous highs is not ruled out.
SILVER
Silver is also trying to move up, although it was down 0.97% for the day. The move in the previous session was really large, and some digestion of that move is taking place right now.% and seems to be stabilizing with the potential to rise, while silver increased by 1.88%.
Advance Decline Ratio
The Nifty 500 advanced decline ratio stood at 441 to 58 stocks, which is extremely bullish in favor of the green.
Heat Maps
The entire heat map is largely green, though you had some spots of red including NTPC, Sun Pharma, HDFC Life, and a few other stocks like Dr. Reddy’s. Pharma, which had been running up, took a back seat today because risk stocks were running up. Adani Ports was up 5%, Reliance up 2%, State Bank 4%, HDFC Bank 1.5%, and Mahindra 2.5%.
Many stocks were running up, and the Nifty Next 50 heat map was also doing very well. You can see very big gains across the board with pharma stocks taking a back seat. HAL and DMart were some of the big movers from the Nifty Next 50 space.
Movers Of The Day
In the mover of the day segment, Garden Reach Shipbuilders Engineering Limited ran up almost 20% with strong results, and that lifted up all shipbuilding stocks.
Ola also did very well at 13.55% with some new news about its sales crossing the one million dollar mark, but it has been beaten down so badly that these moves are still really meaningless.
Sectoral Overview
Looking at sectoral trends, all sectors were up today. Defense was up 5.2% in a single session, and a move like this signals a meaningful U-turn for the defense sector. Capital markets were up 4.6% and Tourism was up 4.2%. It would not be surprising if the markets do not easily break the recent lows now. It looks like the market’s confidence is coming back, and you can clearly see risk-on assets going up while pharma and central PSUs were the least among the gainers.
Sector of the Day
Nifty Defence Index
Defense stocks like Cochin Shipyard, Mazagon Dock, Bharat Dynamics, Apollo Micro, and Garden Reach all did extremely well with nearly double-digit returns on each of them.
U.S. Market
In the US markets, there were some good gains in the previous session of almost 2.5% to 3%. Intel Corporation jumped up 7%, while Meta, Palantir, Amazon, and Caterpillar all moved up 6% to 7%. The entire world is basically watching the US markets as the lead market and following them for now to take cues about whether the war is escalating or de-escalating. Nvidia was up sharply by 5.5% and Google was up 5%. Microsoft, Amazon, Meta, Broadcom, and Intel all did extremely well in the previous session on the NASDAQ 100.
