Where is the market headed?
Looking at the BHEL chart, an unbelievable milestone has been reached as the stock has crossed its previous highs after almost 20 years. Between the years 2000 and 2007, BHEL experienced a massive rally where the stock price surged from nearly four rupees to almost 300 rupees. Following that seven or eight-year growth period, there was a lull for nearly the next 20 years. It is only now that those highs are being crossed decisively. These types of decadal moves happen very infrequently and can be very, very sharp. While it may not be immediately evident on the screen, the stock is up nearly 70% in just the last five weeks.
The essential point here is the importance of being invested during these kinds of moves, whether it was in the past or right now. There is no need to be invested in stocks when they are stagnant, as one should not waste entire capital and time waiting for action to happen. Even if an investor is only able to capture a part of such a move, it is more than enough for capital to keep growing healthily across the board.
Shifting focus to the markets for Monday, 4th of May, some rumors surfaced during the recording of this update that two US ships have been attacked by Iran. Consequently, oil prices suddenly spiked from $109 to $114, suggesting that an escalation of conflict looks to be back once again.
Market Overview
In other news of the day, the ruling party in the government has acquired more states. The main upset occurred in the state of West Bengal, a region where many believed no other party could penetrate, yet they have done it. This political development is perhaps why the Indian markets were celebrating this morning, with the Nifty reaching almost 24,300. However, in the afternoon, news reports from the war scene indicated that nothing is being resolved right now. As a result, the market fell a couple of hundred points from that top and closed at 0.51%.
Nifty Next 50
The market has gone flat over the last several sessions. The Nifty Junior was up 0.92%, performing slightly better than the Nifty.
Nifty Mid and Small Cap
Mid-caps rose 0.71%, while small caps were up 0.98% and are currently at the edge of breaking out from two recently made tops.
Bank Nifty
The Nifty Bank was completely flat at 0.03%. Overall, the market is not giving too many cues regarding its next direction.
GOLD
Gold is also slipping by -0.65%.
Crude Oil
Crude oil was at 109.91, though it moved to 112 following the initial screenshot.
Advance Decline Ratio
The advanced decline ratio remained good throughout the day; despite a dip after noon, there were still 359 advances to 140 declines.
Heat Maps
The heat map shows Reliance and Levers pulling the market up, while TCS, Kotak, Bharti Airtel, and Dr. Reddy’s pulled it down. Adani stocks have been doing phenomenally well, as have Eicher Motors and Maruti. HDFC Bank, ICICI Bank, and L&T also contributed to the upward movement.
Within the Nifty Next 50 space, defense stocks performed very well, with HAL up 5%. Finance stocks like Muthoot and Chola, along with real estate stocks like DLF, also showed strength. While there is a general sense of positivity, some stocks like DMart, Mazagon Dock, Tata Capital, and Tata Power were down.
Movers Of The Day
Specific movers of the day include DB Realty, which rose 20% following a favorable Bombay High Court ruling in a long-running land title case. Dr. Lal Path Labs also surged 15% on the back of strong Q4 numbers.
Sectoral Overview
Regarding sectoral trends, real estate rose 2.4%. In the last month, real estate has gained 21%, making a grand comeback after a long time. Over the last year, real estate remains negative despite this recent 20% run-up, but this past month has been very strong. The market may be sensing that interest rate cuts are on the horizon or that the cycle is strengthening for real estate stocks like Anant Raj, DLF, Lodha, Godrej, and Prestige.
On the daily front, MNC, metals, and manufacturing sectors all gained more than 1%. Other sectors remained soft, with IT losing 0.95% again. Over the last month, IT has been the only big loser at minus 4.5%, and over the last year, it is one of the worst performers at minus 19%.
Sector of the Day
Nifty Realty Index
U.S. Market
In the US markets during the previous session, there were good gains in Oracle, Intel, American International Group, Salesforce, and Charter Communications, all running up 4% to 6%. The Dow Jones was down a quarter percent, the S&P was up a quarter percent, and the Nasdaq was up 0.94%. Note that some of these stocks could be part of the Weekend Investing US stock strategy.
The NASDAQ 100 heat map shows Apple, Micron, and Intel running up very hard. Amazon and Microsoft were also up, as were Google and Broadcom. Nvidia, ASML, Meta, and Netflix were down just a little bit. US markets generally appear to be doing reasonably well.
Tweet Of The Day
Another significant data point today is the US Dollar to INR chart, which crossed 95.08. The RBI is now exploring steps to mobilize dollar inflows as more reserves are needed to defend the rupee.
Current reserves are being depleted, so more inflows are required. Perhaps the launch of tax-free NRI bonds is a potential path forward. Repatriation dollars from NRIs, especially from the Middle East, have weakened due to the war. This has created a dearth of dollar inflows in that segment, contributing to a brewing crisis of confidence in the Indian rupee that needs to be addressed.
