The WeekendInvesting Newsletter
Another superb initiative from our Research Desk is The WeekendInvesting Newsletter. This 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 linked to the videos we shoot, so you can choose to watch or read the content according to your preference.
Check out our past newsletters.
WeekendInvesting Specials !
This is why you may not be making Big Money from Markets !
On Sundays, we do special episodes backed by a lot of data, and we try to find insights using that data. This and more will be available on the Weekend Investing app, which you can get on Google Play and the App Store.
Markets this week
This week, the Nifty rose by more than 2%, providing a strong start to the month. The movement was almost linear, with some volatility on the expiry day. What’s notable is that this strength came despite seemingly negative news. GDP numbers indicated a slowdown, and on Friday, the RBI chose not to cut the repo rate despite market expectations of a quarter to half a percent reduction. Yet, despite these disappointments, the market held its ground, reflecting underlying resilience.
The ability of the market to withstand negative surprises suggests its internal strength. Several events that could have triggered a correction didn’t, implying that the market may have made up its mind to move higher. The Nifty has also broken through several resistance levels mentioned in previous weeks. An inverse head-and-shoulders pattern seems to be in play, pointing to a potential target of nearly 25,500. The market also retested and bounced off its 200 DMA, a pattern observed repeatedly over the last few years.
This week’s strong weekly candle underlines the ongoing uptrend. Interestingly, this gain comes at a time when skepticism is high and few believe in the rally’s sustainability. Historically, when the majority doubts an advance, the market often proves them wrong. It’s precisely in these conditions that markets tend to climb. The internal dynamics often defy consensus, ensuring that most people struggle to predict the market’s direction accurately.
S&P 500 Overview
Globally, the US market—often considered the “mother market”—continues to soar, gaining nearly 1% this week. The S&P 500’s rise from around 4,400 last year to over 6,000 now represents a substantial 40% gain. Currently, about 60% of global market capitalization is concentrated in the US. By contrast, India’s share is around 2%, underscoring the outsized influence of the US on global financial markets.
GOLD Overview
Gold, priced in INR, has been relatively dull and consolidating in a range around 7,600. It had peaked near 8,000 during Diwali. For those interested in plotting INR gold rates, you can derive them from XAU/USD by incorporating USD/INR conversion, adding about 6% for duties, and dividing by 31.109 (the number of grams in a troy ounce). Central banks continue to buy gold, and the Reserve Bank of India recently added about 23 tons to its reserves.
Dollar Index Overview
A key metric that investors are watching is the dollar index, which compares the US dollar against a basket of six major currencies. When the dollar index rises, capital often flows into dollar-denominated assets, potentially draining funds from emerging markets and precious metals. Conversely, a weaker dollar index can encourage flows into these markets. Recent FII outflows in India may be partly due to these currency and yield dynamics, as well as new KYC and SEBI regulations forcing certain foreign entities to liquidate holdings.
Benchmark Indices Overview
Among benchmarks this week, smallcaps led with a 3.7% gain, followed by midcaps at 3.6%, and the Nifty Next 50 at 3.2%. The Nifty 500 rose 2.76%, and the Nifty 50 was up 2.27%. Over the last year, the Nifty Next 50 has outperformed significantly, up 44.6%, while the Nifty 50 has gained 17.9%. These figures don’t suggest a bubble-like scenario for large caps. Even over longer horizons, the performance is robust but not exaggerated. While smallcaps show a strong 30.6% CAGR over five years, large caps remain more subdued. Hence, prolonged FII selling is unlikely, and domestic flows may continue to support mid and small cap segments.
Sectoral Overview
At the sectoral level, real estate, PSU banks, metals, IT, media, services, financial services, banks, and commodities all performed well this week. FMCG was the outlier, down by 0.3%, and has been a laggard over multiple timeframes. On the other hand, sectors like real estate and public sector enterprises show robust gains over both short and long periods, with real estate delivering outstanding compounded returns over five years. While some may call certain sectors a bubble, the actual data often reveals sustained growth over time.
Examining sectoral momentum across multiple timeframes—one week, one month, three months, six months, and one year—helps identify trends. Real estate and PSU banks rank highly across shorter durations, while FMCG consistently lags. Sector rotation is an ongoing process, and a well-crafted strategy should capitalize on these shifts, catching new leaders as old ones fade. No single sector dominates perpetually, reinforcing the importance of adaptability in investing.
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 can use the smallcase app or log in to weekendinvesting.smallcase.com to see the rebalance. A backup email is sent by mid-day Monday if you have not rebalanced by then and yet another one a
Note: We are not including LIQUIDBEES as an ADD or an EXIT count.
WeekendInvesting Products – LIVE Index Data
Many of you had asked us to make the index series of all WeekendInvesting Products available so that you could perform your own analysis and studies. You can find a link to the LIVE sheet here and also on the HUB under the support column in the content tab.
