Where is the market headed?
Just when everybody thought that real estate had peaked and the cycle was over, very important news has come from Crisil. According to the rating agency, home loans are set to grow at 17 to 18% in FY27 and FY28. This is a huge number.
The home loan market is expected to sustain strong momentum, with assets under management growing at 17 to 18%. This development is quite big, and real estate stocks are already responding to this cue and going up. Some of these stocks will be showcased later.
Market Overview
The Nifty ended the day up 0.59%, putting the index back at the 24,000 mark. It feels like the market has crossed 24,000 a zillion times in the last three months. The silver lining to the confusion still going on across many fronts is that the market is not falling.
Oil has stabilized, so there is no pressure from that front anymore. The US-India deal is yet to be closed, which leaves some uncertainty, but other than that, it is pretty much business as usual for the market now. There is some concern about a liquidity crisis in the markets given a new regulation being enforced on prop traders and others starting from the 1st of July. Some people are of the opinion that liquidity in the market could go down reasonably big because of this.
Broader Market Indices
Looking at the broader indices, the Nifty Next 50 was up 0.66%, while mid-caps and small-caps gained 0.2% and 0.4% respectively. Banks did quite well, rising 0.85%.
Heat Maps
The banking space is probably getting a tailwind from recent mergers and acquisitions action, as Kotak is acquiring the retail business of Deutsche Bank. Whenever that kind of action happens, the industry sorts of starts to jog. Axis Bank, Kotak Bank, and even State Bank of India all did well today.
Meanwhile, the FMCG sector, which was completely down in the dumps, suddenly woke up today. Stocks like ITC, Hindustan Unilever, and Nestle all did all right. Autos also performed all right. On the weaker side, the steel sector is looking softer than before and was smashed down again, with those stocks losing 2 to 3%.
The IT heavyweights also struggled, with TCS, Infosys, HCL Tech, and Tech Mahindra all ending the day down. However, Reliance supported the markets, and Adani stocks came back with a few percentage gains on each of them.
The Nifty Next 50 heatmap looked similar to the main index. Capital goods and some defense stocks were up, Adani stocks gained, and FMCG did all right. DLF made a big move of 4.6% after a long time.
Top Gainers & Losers
Sectoral Overview
In terms of sectoral moves, there was a big move down for IT, which fell 2% today. Just this week, IT is down almost 6%. Just this month, it is down 19% in the last one month alone. Over the last one year, the sector is down 31%, which is quite a crazy fall. Metals also dropped 1% today. On the gaining side, Nifty Real Estate saw a super gain of 3.58% today. FMCG was also very nicely up at 2%, and Media rose 2%. Capital markets came back as well, with BSE gaining 2%.
Sector of the Day
Nifty Realty Index
Real estate stocks have gone well beyond their May high, making a nice mark. Aditya Birla Real Estate, Godrej Properties, DLF, Prestige, and Lodha all performed well in the real estate sector.
U.S. Market Updates
Reviewing the previous session of the US markets, equities were all up. The Nasdaq climbed 1.68% again, and the S&P 500 rose 0.8%. The Dow Jones and Russell 2000 also advanced by 0.2% and 0.4% respectively.
The top gainers included AMD, as the same bunch of tech stocks jumped up. AMD, Intel, Texas Instruments, Caterpillar, and Apple all joined the gainers list this time. These were the top gainers, while AT&T, Verizon, FedEx, T-Mobile, and Medtronic lost ground in the Nasdaq 100. Some of these stocks could be part of the Weekend Investing U.S. stock strategy, though these are not recommendations.
The Nasdaq 100 heatmap was very green today, showing big names doing really well alongside some losses in retail consumer stocks. Costco, Walmart, Amazon, and Netflix were down a bit, and Qualcomm was also down slightly, but other than that, there was a lot of green on the screen. LRCX, Applied Materials, ASML, and AMD all did quite well for the day.
Tweet Of The Day
Some recent analysis on IT stocks shows that people are beginning to justify holding them by saying that at least these companies have real estate. However, an investor should never deviate from their core thesis. If an IT stock was bought for the IT business, then the IT business is what should be evaluated. If that business is not to someone’s liking, it is time to get out of it. If it was bought for the land in the first place, then of course that land has been going up for the last few decades, so perhaps staying makes sense. But if the core thesis was that these companies would deliver certain growth in the US markets or elsewhere, and that is not playing out, then the thesis must be re-examined rather than trying to self-justify by noting that they also own land.
Furthermore, if IT stocks were bought purely based on price trends because they were going up, then the exit station has long passed. A trader should not have been waiting through a 50% down move in Infosys if they had a trading orientation towards the stock. Knowing exactly why a stock was bought, and understanding what conditions or prices will trigger an exit, is very important. That clarity needs to be in mind on the very day any stock is purchased, whether the exit will be driven by the business, the price, or something else.
