Where is the market headed?
It has been a good week after many weeks of waiting. As mentioned at the beginning of the month, there was a high probability that April would be a green month. After four consecutive down months, the market was due for a bounce, and it is a notable coincidence that ceasefire negotiation attempts in the ongoing war have aligned with this timing. The first crucial meeting for these negotiations is set for Saturday. While there are many rumors circulating—including conflicting reports about whether the Iranian delegation is traveling to Pakistan or if they have been shot down—the news narrative remains uncertain.
However, the market is signaling a sense that the war is practically over in terms of its ability to harm India’s oil supply. For India, the key factor is maintaining the flow of oil, fertilizer, and other essential goods. As long as those supplies continue, the regional conflict does not impact the country as directly. This situation also presents an opportunity for the U.S. to exit the conflict and allow the Middle East to manage affairs internally.
Regarding the rumors about the Iranian delegation not reaching Islamabad, it is difficult to verify their accuracy, but the market notably did not pay heed to them, which is a positive sign.
Market Overview
The Nifty closed up 1.16%, indicating that the previous day’s loss was merely a profit-booking event. Stocks looked reasonably strong, and the index has now closed above 24,000 for the first time in over a month, wiping out the losses of the previous several weeks. While the market remains below its all-time highs, this position is very acceptable compared to the end of March. The short-term outlook remains positive.
Nifty Next 50
Nifty Junior is performing exceptionally well, rising 2% today and marking six days of continuous gains. This represents a fast comeback for Nifty Junior, where both the short and mid-term trends have turned positive.
Nifty Mid and Small Cap
Mid-caps and small-caps also saw gains today, rising 1.6% and 1.61% respectively. Both indices have enjoyed six days of continuous gains, and while a V-shaped recovery may not continue without some consolidation or profit-taking, the move from near 14,000 to 15,753 is a significant relief.
Bank Nifty
Nifty Bank also looked strong with a 1.99% gain. This recovery highlights the risk of getting out of the market due to fear; those who exited at the end of March missed this entire rally, including a significant gap up. Once investors give up their positions, they often find it very difficult to buy back in at higher prices.
GOLD
In other asset classes, gold remained flat at 0.09%, while crude oil is holding at a middle ground of 96 dollars after a volatile journey from 70 dollars to 120 dollars. The long and mid-term positive trends for crude remain intact.
Crude Oil
Advance Decline Ratio
The market breadth was very healthy today, with an advance-decline ratio of 436 to 63.
Heat Maps
While the heat map showed some losses in IT, pharma, and energy stocks, these were offset by gains in banking, autos, and infrastructure. Nifty Next 50 also saw a nice green cover across the board.
Movers Of The Day
In the mover of the day segment, Cohance rose 20% after a significant drop over the past few months. Many IT stocks seem to be finding a bottom and looking for a new leg up, and Cohance appears to be among them.
Conversely, Coal India dropped 4.4% following a cut in e-auction prices intended to help firms absorb cost surges. Lowering the price of a final product typically harms stock prices, which impacted Coal India despite its strong performance a few weeks ago.
Sectoral Overview
Looking at sectoral trends, almost every sector was up except for Nifty IT, which fell 1.9%. The TCS results released after the market closed yesterday likely failed to excite investors. CPSE and pharma were also relatively flat.
The standout performer was Nifty Auto, which gained 2.85% today, led by stocks like Sona Comstar, Samvardhana Motherson, Ashok Leyland, Exide, and Eicher Motors. Other sectors such as real estate, financial services, tourism, and various banking segments also saw gains of around 2%.
While the IT sector is down, it is not necessarily “down and out,” though a two-day low close suggests some current softness across stocks like Coforge, Infosys, TCS, and LTIMindtree.
Sector of the Day
Nifty Auto Index
Nifty IT Index
U.S. Market
In the previous U.S. session, markets were led by gains in Amazon, Intel, Texas Instruments, Netflix, and Meta, with most indices gaining 0.6% or more. While the heat map was mostly red, Palantir has been dropping significantly, losing 7% after peaking between November and January.
Meanwhile, Amazon is gaining ground after a quiet period, and Intel has been performing well. These observations are part of the U.S. weekend investing strategy and are not recommendations.
Tweet Of The Day
The tweet of the day comes from Sumit Baal regarding Goldman Sachs’ ratings of the Nifty. He noted sarcastically that Goldman Sachs serves as a great inverse indicator, as they downgraded the Nifty at its bottom on March 27th, only for the market to rally nearly 9% since then.
Often, research reports are lagging indicators, and the market has already priced in the news by the time a recommendation is made. It is advised not to blindly follow these reports for transactions; if you are influenced by one, consider adding a layer of rules to your strategy.
