Where is the market headed?
Today, the analysis begins with a notable observation regarding the CNX 500 chart over the last 20 years. When viewing this data, it is evident that, barring the 2008 episode where it took six years to reach a new high, the market has spent time consolidating before hitting new highs in previous cycles. Specifically, the market spent 2.75 years making a new high between 2018 and 2020, and 1.75 years between 2021 and 2023. Currently, the market has spent about 1.5 years without hitting a new high and is now reasonably close to it. From the perspective of the last decade, the consolidation phase typically concludes within this two-year region. While it remains to be seen if this will happen this time, the prevailing despondency among many market participants seems misplaced, as the current situation is not particularly dire.
Market Overview
Turning to the day’s market performance, there was pressure toward the second half of the session. Although the market started well, it began to give up gains after 1:30 PM. Nevertheless, the Nifty managed a gain of 0.76%.
Nifty Next 50
The Nifty Junior gave up all its gains, marking the second consecutive day where the market attempted to rise but failed. This suggests the market is nearing a resistance zone, particularly in the Nifty Midcap area. The market reached nearly 22,400 before succumbing to 22,200, marking the second day of resting at that same level.
Nifty Mid and Small Cap
Small caps also gave up some ground but remained up 0.49%, with small and mid-caps currently looking better than the larger caps.
Bank Nifty
The Nifty Bank remained absolutely flat at 0.01%, with all momentum trends remaining negative.
GOLD
Gold lost some ground, falling 0.46%. As this is the end of the month, many positions are being rolled over in global gold futures, which may be contributing to this pressure. Furthermore, the market is awaiting the Federal Reserve outcome, particularly regarding the new Fed chairman and potential interest rate changes.
Crude Oil
Crude oil spiked by almost 3% in the second half of the day, causing markets to waver. This movement was triggered by a tweet from President Trump, which the market interpreted as a signal of volatility, leading to a spike in oil and a subsequent market downswing.
Advance Decline Ratio
Despite the late-session fall, the advance-decline trend managed to stay positive with 263 advances to 236 declines on the Nifty.
Heat Maps
Reliance was largely responsible for the gains, ending up 2.63%. Coal India also performed well, alongside Maruti and ITC, which showed strength after a long period of stagnation. Sun Pharma and Bharti Airtel were also among the winners.
Within the Nifty Next 50 heat map, there were good gains in Vedanta, DB’s Lab, TV’s Motors, and Mazdoc, while losses were seen in Union Bank, Adani Power, and Jindal Steel.
Movers Of The Day
In the movers of the day, Bandhan Bank moved up 11% following a Q4 profit beat, which encouraged smaller private banks to rise as well. Sapphire Foods also surged 19% following an increase in sales. These results highlight that even reasonable earnings are being treated as surprises by the market, which is currently not expecting good results, leading to unexpected reactions.
Sectoral Overview
Sectorally, Media was the worst-performing sector, while FMCG was the best, rising 1.75%. Sector rotation is occurring frequently, with the previously beaten-down Real Estate sector up 1.48% and Autos up 1.15%. Over the last month, Real Estate has jumped 20%, Autos are up 7%, and FMCG is up 11%.
Sector of the Day
Nifty Realty Index
Real Estate recovery was led by Lodha, Aditya Birla, Prestige, Gotrej, and Phoenix, all of which have recovered their March losses.
Nifty FMCG Index
Within the FMCG space, there is a clear V-shaped recovery, with the sector returning to pre-Iran war levels, led by ITC, Nestle, Tata Consumers, Varun Beverages, and Hindustan Unilever.
U.S. Market
Regarding US markets, the previous session saw losses in Broadcom, Oracle, United Parcel, UPS, AMD, and Booking Holdings. The market was largely down, with the Russell falling 1.1%, the Nasdaq down 1%, the S&P 500 down half a percent, and the Dow Jones remaining flat.
The Nasdaq 100 heat map was largely red, particularly in the semiconductor space, and the overall market breadth remained quite negative, with only larger names like Apple and Microsoft remaining in the green.
Tweet Of The Day
Finally, the USD INR chart is at its previous all-time high close, near 94.78, smashing theories that the INR would strengthen toward 80 or 70. With oil at $107, this presents a significant worry for India, especially since the RBI projected an average of $85 for 2026. This puts a dent in the balance sheet, explaining the fall of the INR. Export companies, particularly in pharma and IT, may benefit from this trend.
