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 past week was not a great one for the markets. There were multiple utterances from the U.S. regarding tariffs on India’s pharma and IT sectors, which added considerable uncertainty. On top of that, large-cap IT stocks like Accenture saw steep declines in the U.S., creating negative headwinds for the sector globally. The continuous selling pressure from FIIs also added to the gloom. Overall, positivity was scarce, and the market sentiment remained weak. Another angle to this downturn comes from the global trend where markets tend to decline after rate cuts, a phenomenon I had discussed in my earlier videos. It is difficult to isolate one single reason for the decline in Indian equities this week, but the combination of tariff worries, global weakness, and the after-effects of rate cuts all seem to be weighing heavily on investor sentiment. The result is a dull and challenging week where markets seem to be testing the conviction of the last standing bulls, even though index levels are not yet alarmingly bad.
Looking at the daily chart of Nifty, the picture becomes clearer. The index has registered seven consecutive red candles, six of which ended with lower closes. This has brought Nifty back down near the key support zone of 24,400–24,300. What is more concerning is that we have slipped below both the 20-DMA and the 100-DMA, signaling that near-term momentum has clearly faded. During the first half of September, there was optimism that the market had broken above a pivot point and might push towards fresh highs. However, that move has fizzled out, and the charts now suggest a possible retest of lower support levels. If the index can hold the 24,300–24,400 zone, it would be a constructive sign, but if this support cracks, it opens the door for deeper pain in the near term.
Nifty – Weekly Chart Perspective
The weekly candle only reinforces this bearish undertone. The Nifty ended the week down by a sharp 2.65%, printing a long red candle that looks menacing on the charts. There are also multiple gaps visible on the chart, and while one hopes the market doesn’t slide down to fill them, the possibility cannot be ruled out. The overall structure now appears vulnerable, and much will depend on whether the market can stabilize around the current support zone.
S&P 500 Overview
Meanwhile, the S&P 500 in the U.S. ended relatively flat, down 0.31% for the week.
GOLD Overview
Gold, however, continues to shine and has now notched six consecutive weeks of gains, an uncommon streak. Gold rose another 2.69% this week, and the inverse correlation is clear—when Nifty struggles, INR gold tends to perform well. This makes gold an excellent counterbalance for Indian equity investors, particularly in periods of volatility.
Dollar Index Overview
The dollar index added 0.5% this week but remained range-bound. The U.S. administration clearly wants the dollar index to weaken, but so far, that hasn’t materialized beyond its current limits. A weaker dollar would be beneficial for emerging markets like India, but until that happens, global risk appetite remains capped.
Global Indices Overview
When looking at global indices, the picture isn’t encouraging either. Adjusted to dollar terms, most major markets were down. Nifty fell the most, down 3.2% in dollar terms, followed by Nifty 500 at -3.8%. The S&P 500 was down 0.3%, Russell 2000 slipped 0.6%, Hang Seng dropped 1.6%, and Australia was down 1%. Clearly, India has underperformed global peers by a wide margin this week. On a 12-month basis too, India stands out as one of the only markets in the red, while others like Germany (+27%), Hang Seng, and NASDAQ have delivered strong returns. Over a five-year horizon, however, India looks far better, with dollar-term growth of 13–15%, broadly in line with NASDAQ and S&P 500, and stronger than Hang Seng, Nikkei, and Australia.
Global Momentum
Momentum scores on global indices tell a similar story. NASDAQ leads the charts, followed by Nikkei, Canada, and S&P 500, while India languishes near the bottom. For nearly a year now, India has consistently ranked 14th or 15th across all timeframes—one week, one month, three months, six months, and one year. This prolonged underperformance suggests India may simply be consolidating after its strong outperformance over the past 2–3 years, waiting for earnings to catch up before a new wave of strength begins.
Benchmark Indices Overview
On the domestic benchmark indices, three- and five-year returns remain solid, but mean reversion is at play. For example, small caps have delivered almost 28% CAGR over three years, far higher than their historical average of 15–16%. Midcaps and Nifty also remain well above their long-term averages. Such periods of outperformance are usually followed by stretches of no-return or consolidation, which is what we’re seeing now. For this week, small caps fell 4.7%, midcaps were down 4.2%, and Nifty itself dropped 2.65%, with all major indices closing deep in the red.
Sectoral Overview
Sectorally, the pain was widespread. IT bore the brunt, plunging 7.9%, wiping out gains from the Infosys buyback just a month ago. Over longer periods too, IT has underperformed badly—down 6.6% over one month, -13% over three months, and -20% over one year. Its five-year CAGR of 11.4% is among the weakest across sectors, better only than oil & gas and media. Other notable losers this week included capital markets, tourism, defense, pharma (hit midweek by U.S. tariff rumors before relief came later), and real estate (-6.1%). Metals, PSU banks, financial services, and central PSUs also lost ground, though to a lesser extent.
Momentum score rankings highlight where strength still lies. PSU banks lead the pack, followed by metals, autos, MNCs, and commodities—sectors that investors may look at for short- to medium-term opportunities. At the bottom sit IT, real estate, media, tourism, and pharma, all of which remain under pressure. Some sectors like CPSEs and commodities are showing short-term improvement, while others like defense, capital markets, and autos are seeing short-term declines after strong rallies earlier. This rotation underscores the need for active allocation and discipline in navigating volatile markets.
Special Video
Over the last 35 years, Nifty has delivered an impressive 13% CAGR. And yet, most retail investors don’t make any money.
We have a very SPECIAL VIDEO that discusses this problem (out on 28 Sep 2025 at 11 am)
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
• Exclusive announcements & offers
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.
