Where is the market headed?
It was a good end to the week for the markets, following a recent period of losses. The market opened with a significant gap down. However, surprisingly, strong buying activity was initiated, which helped to recover a substantial portion of the day’s losses.
While this cannot yet be called a full trend reversal, it certainly suggests there is some buying support at the current levels. The stability of this support will be tested in the coming week, as there are many corporate results scheduled that are likely to influence market behavior.
The Reserve Bank of India (RBI) also made a significant announcement, calling out strong capital inflows for the coming times and assuring the market of the strength of the currency, which itself moved up slightly.
Market Overview
Looking at the charts, the market is taking support exactly at the average shown. The Nifty closed at a minor loss of -0.07%. After hitting a low of 25,318, it closed about 170 points higher from that bottom, ultimately losing only 17 points from the previous session’s close.
Nifty Next 50
The Nifty Junior made a truly remarkable comeback, recouping almost a thousand points that were lost in the morning, closing with a loss of only 17 points. Such comebacks often signal a bottoming sign for the current short-term trend (the last three sessions). While buying has clearly emerged, this does not assure a complete trend reversal; for a higher probability of that, one would need to wait for a two-day high.
Nifty Mid and Small Cap
Mid-caps also staged a strong recovery, actually gaining beyond yesterday’s close at 0.47% up. Small-caps ended the day with a small loss of 0.24% but still recovered significantly, gaining almost 200 points after touching a bottom of 16,825.
Bank Nifty
The Nifty Bank made a good move, closing 0.56% up for the day. This strong move, coming after a long uptrend followed by a profit-taking down-move, could indicate a sort of continuation, which will be determined next week.
GOLD
In commodities, Gold is stabilizing at the current rate of 12,103 per gram, up 0.74% for the day.
SILVER
Silver was up nicely by 1.9%, trading near 1,48,000 per kg.
Advance Decline Ratio
A look at the Advance-Decline ratio shows a very perceptible, continuous advance from the start of the day, with advances steadily climbing from the bottom to close almost even at 239 advances to 261 declines.
Heat Maps
The Heat Map showed strong performance from stocks like ICICI Bank, Bajaj Finance, Bajaj Finserv, HDFC Life, Sriram Finance, Mahindra and Mahindra, Tata Steel, and Naukri. Conversely, stocks that lost some ground included ITC, Bharti Airtel (post its results), Reliance, TCS, HCL Tech, Hindustan Levers, and State Bank of India.
The Nifty Next space saw Divi’s Lab, ABB, LTIM, Indian Hotels, Godrej CP, Adani Power, and Bajaj Holding lose ground. However, LIC, PNB, Mazdoc, Britannia, Jindal Steel, Hinzinc, Vedanta, Torrent Pharma, PD Lite, and Solar Industries made notable gains in the mover of the day segment.
Mover Of The Day
BSE was a standout performer, moving up 9% in a single session. This move coincided with a possible inverse head and shoulders pattern, which could imply a target of up to 500 points above the neckline, potentially taking BSE up to 3,000 in this rally.
The SEBI Chairman’s statement that the weekly F&O is on provided a boost, as the regulator seems to have taken a cue from the market situation after earlier comments about potentially withdrawing weekly F&O.
Sectoral Overview
In the sectoral trends, Capital Markets were on fire, up 3.11%. Metals also did very well at 1.4%. PSU Banks, Defense, Financial Services, Public Sector Enterprise stocks, and Auto stocks (after posting good October numbers) all performed quite well. The biggest losers were Infrastructure stocks (1% down), Tourism (0.8% down), IT, Consumption, and Pharma stocks, which gave up some of their recent gains.
Sector of the Day
Nifty Capital Market Index
Within the thriving Capital Market space, BSE was up 8%, alongside good gains by Angel One, KFin Technologies, CDSL, and Multi Commodity Exchange.
U.S. Market
The U.S. markets session the previous day was negative, with the S&P 500 down 1%, the Dow Jones down nearly 0.8%, and the NASDAQ and Russell both down nearly 2%. U.S. markets seem to be giving up some recent gains, with much talk that the AI part of the market may have topped off, suggesting more reasonable valuations should be achieved. However, the future remains uncertain.
Stocks like AMD (lost 7.2%), Palantir (lost almost 6.8%), Salesforce (down 5%), Nvidia (down 3.6%), and Qualcomm (down 3.6%) were among the biggest losers in the S&P 500 space.
Tweet Of The Day
In the Tweets of the Day segment, attention was drawn to the upcoming Lenskart IPO. A surprising advisory has already issued a sell rating on the IPO even before its listing. Given that “everybody’s mother and their grandmothers” are invested either directly or through mutual funds, and despite the high subscription rate (around 28 times), this sell rating is considered a very big warning sign.
