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.
Nifty on the Daily Chart – 50 & 200 DMA Perspective
The Nifty chart this week tells a mixed story. Although Nifty is up 2.68%, this number does not fully capture what is happening internally. The index has bounced for the third time from the 22,775 level, which appears to be a key support.
Nifty – Weekly Perspective
The chart suggests that the market is extremely oversold after five consecutive months of decline—a condition that is uncommon. This oversold state indicates that the probability of experiencing at least one bounce month, whether this month or next, is very high. Although this may not signal an immediate reversal or a dramatic turnaround, the overall sentiment suggests that an intermediate bottom may be near.
S&P 500 Overview
In contrast, the S&P 500 is performing very well. The index is up 1.48% and has reached a new all-time high on the weekly chart. With the U.S. market showing robust strength and the dollar gaining, there is little reason for most foreign institutional investors to shift their focus away from the U.S. market.
GOLD Overview
Gold is also on an upward trajectory, rising almost 1.5% this week. It is becoming almost a no-brainer for many investors to buy gold, as its price has surged significantly. In Indian rupee terms, gold has climbed from nearly 75,500 to 86,200 per 10 grams over two months—a fantastic gain. Although this rally might eventually see a correction as gold enters an overrated zone, the past eight weeks have been remarkable for the precious metal.
Dollar Index Overview
The dollar index is emerging as the uncertain factor this week. It recently peaked at 110 but is now reversing and has broken below the 107 breakout point. This decline in the dollar index is the only hopeful sign, as it might lead to a reduction in FII selling and help stabilize the rupee, which has been slipping consistently.
Benchmark Indices Overview
Looking at benchmark indices, the picture remains mixed. The Nifty Small Cap 250 index is down 10%, midcaps have dropped by 7.5%, and the Nifty Next 50 is down 6.2%. Larger caps, including the Nifty 500, have fallen by 4.6%, while Nifty itself is down 2.68% over the last month. Although the broader index has stagnated in the past three months, small caps have seen a more pronounced decline—down 13.5% over six months, with Nifty overall down 5% and Nifty Next 50 even lower at 15%.
However, over the last year, most indices remain in the green except for small caps, which have turned red. It is important to note that three-year returns on Nifty are now below the long-term historical average, suggesting that there may not be much additional downward pressure on Nifty going forward.
Sectoral Overview
Within the Nifty sectors, the capital market segment has taken the heaviest hit, falling by 9.6%, followed by real estate at 9.4%. Defense, media, central public sector enterprises, energy, tourism, oil and gas, and autos have all declined by 6% or more, with the remaining sectors falling between 1% and 6%.
There was no sector that registered gains this week. Over the last month, private banking and financial services have at least stabilized and are not dropping further. Over the three-month period, financial services and private banks have shown relative strength, while public sector enterprises, real estate, energy, defense, and capital market sectors have lost significant ground on a one-year basis. Although capital market and defense stocks, along with financial services, remain in the green, sectors such as energy, oil and gas, and PSU stocks are deep in the red.
Examining the sectoral momentum over various timeframes—one week, one month, three months, six months, and one year—reveals that financial services, private banks, the services sector, and banking, along with IT, continue to lead.
These sectors have maintained their momentum consistently throughout the year. Conversely, energy, public sector enterprises, real estate, oil and gas, and defense are experiencing significant losses in momentum.
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.
Note: We are not including LIQUIDBEES as an ADD or an EXIT count.
