The WeekendInvesting Newsletter is a daily newsletter that summarizes all the stories we cover during the day(market nuggets), including the daily byte that we shoot every evening. This newsletter will be delivered to your email every evening on market days, providing you with a wealth of market-related information. The newsletter includes both summaries and long-form blogs for all the market nuggets covered. These blogs are also link.
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Nifty on the Daily Chart
The week was shortened to four trading days, but it turned out to be an important one. After an extended stretch of weakness—nine consecutive sessions of red candles—the market finally found some relief midweek. Wednesday provided the much-needed turnaround, and Friday acted as a follow-up day, adding confidence that buyers were finally stepping in. This brief shift after persistent selling shows how oversold markets can attract support when selling pressure exhausts itself, and how even short weeks can pack in decisive moves.
Looking closely at the daily chart of Nifty, the index seems to be repeatedly testing a critical support band between 24,300 and 24,600. Over the past six months, every attempt to break below this zone has failed, which highlights its importance as a long-term base. The more times this zone holds, the stronger it becomes as support. However, the flip side is also true—if the market decisively breaks below it, the fall could be sharp and significant. For now, the likely path is sideways action around this support until a fresh tailwind emerges to push the market higher. This ongoing consolidation suggests patience is required, as the market builds energy for the next big move.
Nifty – Weekly Chart Perspective
From a weekly perspective, Nifty ended nearly 1% higher, recovering from the previous week’s decline. However, the bigger picture remains one of digestion. The extraordinary rally that stretched from November 2023 to October 2024 is still being absorbed by the market. Such periods of consolidation are not only expected but also healthy. They allow valuations to catch up with prices and clear out excess froth. Once this digestion phase ends, the next wave higher could resemble the strong rallies of the past.
S&P 500 Overview
On the global front, the U.S. markets continue to chart a very different path. The S&P 500 gained another 1.09% this week, extending a rally that shows no signs of fatigue. Unlike India, which peaked earlier and has since struggled to regain momentum, U.S. markets have powered ahead relentlessly since September 2024. The divergence between the two is stark, reflecting differences in flows, sectoral leadership, and investor sentiment across geographies.
GOLD Overview
Gold, meanwhile, is writing its own dramatic story. Prices rose 3.47% just this week, marking seven consecutive weeks of gains—a rare streak. From ₹9,900 per gram to nearly ₹11,700 in less than two months, gold has surged nearly 17–18%. Such moves are rarely random; they reflect deeper global unease. With the Indian rupee weakening against the U.S. dollar, and the dollar itself losing ground against other currencies, Indian investors are being hit on both sides. In such an environment, gold isn’t just an asset—it becomes a store of purchasing power.
While it may look like gold is “rising,” the truth is that fiat currencies are depreciating against gold. This reinforces the view that gold remains the true constant, while currencies fluctuate in value against it. For investors, this is a reminder to see gold not as a speculative play, but as a tool for wealth preservation amid inflation and currency debasement.
Dollar Index Overview
The dollar index slipped 0.5% this week but has otherwise remained remarkably stable. Many expected it to fall more sharply in recent weeks, especially given the U.S. administration’s preference for a weaker dollar. Yet, it has held its ground. Looking back, under Trump’s presidency, the index had already moved lower, and another leg of decline seems inevitable at some point. When that happens, it should act as a tailwind for both emerging markets and gold.
Global Indices Overview
In the global indices overview—adjusted for dollar terms to allow fair comparisons—there were notable divergences. Brazil fell 1%, but markets like Hang Seng (+3.8%), FTSE (+3.3%), Canada (+2.2%), and Australia (+2.5%) posted strong gains. Nifty managed a 1.4% rise, while NASDAQ also added 1.3%. Over one month, China (via Hang Seng) has led the pack, followed by Japan’s Nikkei. On a three-month horizon, India stands out as the weakest performer compared to global peers.
Over one year, Germany has been the clear standout with a 35% gain, followed by NASDAQ. India, by contrast, remains negative. However, on a five-year horizon, India’s returns of 12–15% CAGR place it near the top of the global league tables, outperforming many developed markets and confirming its long-term structural strength despite short-term underperformance.
Global Momentum
Momentum scores globally confirm the story. Nikkei and Hang Seng lead, while India languishes at the bottom. This isn’t unusual—it reflects the cyclical nature of global equity flows. Germany, which struggled five years ago, is now the top performer. Hang Seng, which looked battered in recent years, has suddenly surged. Capital doesn’t sit still; it rotates across geographies depending on valuations, growth prospects, and macro cycles. For now, India is in a cooling phase, consolidating while waiting for the next cycle of leadership.
Benchmark Indices Overview
Back home, Indian benchmark indices had a decent week, with midcaps and small caps gaining 2%, Nifty Next 50 up 1.8%, and Nifty itself adding just under 1%. Yet, on a one-year basis, the broader picture remains negative—Nifty Next 50 is down nearly 10%, and small caps are lower by 6.4%. Over three and five years, however, returns remain very strong, with small caps and midcaps delivering far above long-term averages. This reversion to mean is natural—periods of extraordinary returns are often followed by slower phases as the market resets before the next growth wave.
Sectoral Overview
The sectoral picture was largely positive this week. PSU banks led with a gain of 4.4%, metals were up 3.9%, private banks rose 2.5%, and defense added 2.3%. Public sector enterprises also gained 2.8%. Virtually no sector ended in the red. Over longer horizons, PSU banks stand out as a consistent outperformer, along with metals and defense. Defense has delivered a staggering 60% CAGR over five years, while PSU banks and CPSEs have been equally strong. Real estate too has delivered 32% CAGR despite its recent struggles. On the flip side, oil & gas and media have been chronic underperformers, with almost negligible returns. IT too has lagged, with a modest 11% CAGR, much lower than high-growth peers. These divergences highlight the importance of sector rotation—staying with leaders when they’re performing and exiting laggards early.
At present, PSU banks, metals, defense, and autos remain in the leadership bracket, while FMCG, media, real estate, and IT are the underperformers. This ranking underscores the need for investors to focus on strong momentum sectors rather than holding on to weak themes. Sector rotation continues to be the key to capturing market opportunities effectively.
IMPORTANT ANNOUNCEMENT
We are now live on our official WhatsApp Channel. We have been sharing all our strategy updates, rebalances, and important announcements here. Please watch this video to know more & join in at the earliest possible.
Why this change?
Because it’s simpler, faster, and right where you already are — WhatsApp makes staying updated effortless.
Stay updated with:
Because it’s simpler, faster, and right where you already are — WhatsApp makes staying updated effortless.
Stay updated with:
• Strategy updates & rebalances
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Here’s an instruction manual if you are not aware of Whatsapp Channels
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Rebalance Update
We give advance notice here on the upcoming changes in your smallcase for Monday. This advance notice can be used to ignore Monday’s update if there is no change. If there is a change indicated you
Note: We are not including LIQUIDBEES as an ADD or an EXIT count.
