Where is the market headed?
There is a piece of good news to share as India has officially returned to the global top five by market cap. This shift comes as Taiwan and South Korea have started their correction. A lot of AI-oriented stocks in India are also looking a bit wobbly right now after having risen very, very hard. It seems that globally, this AI theme is coming to some sort of at least an intermediate top kind of a situation in the US as well, and that has ultimately helped India.
Despite the Indian market going down today, the country has recovered its position as the fifth largest market cap stock market. It is a silver lining on dark clouds in a market that is really not going anywhere and is slipping.
Over the weekend, there were news of Iran and U.S. retaliation. Then, before our market opened, there was news that they will try to talk to each other. That drama basically continues. We are currently in a completely directionless sort of a market zone where a range has been established, and we are just flip-flopping in that range from day to day.
Market Overview
Looking at the data, for the last nine sessions we have remained in this very narrow range without the market going anywhere.
The market was down 0.46% today, and all other indices were also down.
Broader Market Indices
Nifty next 50 was remarkably down at nearly 1%. Mid caps and small caps were down but were not affected as much, dropping 0.31% and 0.48% respectively. Banks were also down 0.77%.
GOLD
Gold was again slipping at minus 1.28%, with 14086 being the calculated price on gold.
Crude Oil
Crude oil is absolutely flat. This was a surprise this morning, as despite the shakeup of the conciliatory talks, oil has not gone up. Oil is behaving very maturely, holding completely flat ground at 73.6.
Heat Maps
The heat map showed that the market lost some ground in autos. Shares of Maruti, Mahindra, Eicher, Tata Motors, and Bajaj were all down. Kotak Bank was also down big by 3.3%, while State Bank of India and Axis Bank were down as well. L&T, Bharti Airtel, and Adani stocks also declined. This happened on some murmurs of challenging the U.S. decision on Adani stocks in their court, which had appeared over the weekend and left all Adani stocks down at least a bit.
In the Nifty Next 50 space, the oil marketing companies, cement, FMCG, autos of course, and banking and finance stocks all lost ground. Conversely, some capital goods stocks were doing well, and some commodities and metal stocks, along with pharma stocks, were also doing well.
Top Gainers & Losers
Sectoral Overview
In terms of sectoral trends, there were hardly any gainers. Central PSUs, pharma, and metals achieved just about a 1% gain. A lot of other sectors remained muted, but bigger losses were seen in Nifty IT, Oil and Gas, Tourism, Media, and a big down move in Nifty Auto.
Sector of the Day
Nifty Auto Index
Autos were down 2% led by Uno Minda, TVS Motors, Mahindra & Mahindra, Maruti Suzuki, and Eicher Motors. This sector has been stuck in this same range since the last three months or more.
U.S. Market Updates
In the previous session on the US markets, there was a down move on NASDAQ, while there were very flat moves on the S&P 500, Dow Jones, and Russell 2000.
Within the NASDAQ 100 losers, Western Digital posted big numbers alongside many of these companies that had been running very, very hard. Seagate Tech, SanDisk, Monolithic Power, and Texas Instruments were down between 8% and 13%. On the gaining side, Workday Inc., Datadog, AppLovin, Zscaler, and Microsoft picked up some gains, rising 5.7% to 9% after a long time.
Some of those positive stocks could be part of the weekend investing stock strategy. Companies like Microsoft and Apple are really shining out, while this entire block of the AI and semiconductor space is really taking it on the chin. Looking ahead to tonight’s session, the market faces a borderline case. Whether this entire ship will break down in terms of the AI space, or if this is just a temporary correction and the market will pick it back up, is yet to be seen.
Tweet Of The Day
In other news, a featured tweet of the day highlighted an interview with Druckenmiller, a renowned fund manager. He made a very profound statement in his argument, stating that he does not care what he pays for a stock. This implies that your cost price and your purchase price actually have no relevance. This aligns with the long-maintained thought that once you have bought a stock, the price at which you purchased it becomes irrelevant.
At every single point, an investor has to evaluate whether the current price is justifiable to hold the asset or not. Whether it was bought at 60 or 50, and the stock is now at 80 or 30, it simply does not matter where it was originally bought. The real question is whether it is justifiable to still hold it at 80, or if it is justifiable to hold it at 30.
Developing that exact clarity of disassociating the purchase price from the ongoing analysis is what actually makes good investors. The shared tweet provides a great opportunity to go and listen to his insights directly. This demonstrates exactly how professional fund managers manage money without getting biased towards their purchase price at all, serving as a valuable lesson for all investors.
