Where is the market headed?
The market saw a small bounce, which seems to be driven by a few potential triggers. One factor is the growing possibility that the Supreme Court may strike down Trump’s tariffs. Even Trump himself appears frustrated, as suggested by his tweets expressing disbelief and asserting a president’s right to take such actions, possibly preparing the ground for an upcoming final decision.
Another potential catalyst is the rumor that the Federal Open Market Committee (FOMC) is likely to cut rates. A third factor is the discussion surrounding a potential stimulus, such as the US distributing $2,000 per person. This general talk of more money entering the system has helped ease markets globally, based on the simple premise that increased liquidity causes everything to go up. While this approach might fuel significant inflation later, the current global response to every problem is seemingly to print more money, a strategy that is expected to have negative consequences at some point.
Market Overview
Looking at the Nifty, the market built on a very nice support established in the previous session, but ended the day up only 0.32%, having given up almost 100 points of the day’s gains after reaching 25,653. The market remains tentative; the trend has not definitively turned, as we haven’t even closed above a two-day high, which is considered a minimum requirement.
The Nifty is still in a zone where it could potentially go down, although it might also consolidate sideways.
Nifty Next 50
Other indices showed similar moderate gains: Nifty Junior was up 0.38.
Nifty Mid and Small Cap
Mid Caps rose 0.45%, and Nifty Bank gained 0.1%. Small Caps, however, were completely flat, up 0%, showing no movement despite the rest of the market’s slight uptick. Overall, the market lacks real inherent strength right now and seems to be experiencing a “rub off” effect from other running Asian markets.
Bank Nifty
GOLD
In commodities, gold is up 1.98% and has hugged its moving average very nicely. Note that calling the top of the gold bull rally could be a mistake and that the recent pause was only a brief stop on the way, which now appears complete. Gold in India (per gram, rupee terms) is now at 12,322.
SILVER
Silver also marked a strong gain of 3.28%. This activity could signal the start of another major upward leg for the precious metals.
Advance Decline Ratio
The advance-decline ratio was relatively flat throughout the day, with 251 advances to 249 declines, indicating a close match between bulls and bears.
Heat Maps
In stock movements, IT stocks saw good gains, as did Reliance, Bharti Airtel, L&T, Asian Paints, and Bajaj Finance. Losses were seen in stocks like Tata Motors, Power India, and SBI, with LIC also losing some ground. Other stocks that lost ground included Lodha, Varun Beverages, Bajaj HFL, Adani Green, Adani Power, BPCL, and United Spirits. Interestingly, several PSU and public sector enterprise stocks are coming back, such as HAL, which is one of them. Torrent Pharma was doing well in the pharma space, along with Hindustan Zinc, Chola Finance, and Enrin.
Mover Of The Day
National Aluminium was a major mover of the day, running up 9.64% due to a good dividend declaration and strong results.
Sectoral Overview
Looking at sectoral trends, Nifty IT led the pack with a 1.6% rise. Defense stocks showed a significant increase of 1.45%; this is noteworthy given that Defense has only managed 3.5% over the last three months, making today’s gain substantial. Pharma was up 0.95%, and Manufacturing also showed signs of recovery. Other sectors were inconsequential, with Media dropping at minus 1% for the day.
Sector of the Day
Nifty IT Index
In the IT space, Infosys, HCL Tech, Wipro, Mphasis, and Persistent all performed well.
U.S. Market
The US market remains very strong despite the ongoing calls for an AI correction. With renewed talk of stimulus and rate cuts, the US market is unlikely to crash down, even though the last session was very flat, with most indices showing less than 0.2% movement either way.
Top gainers in the US included Starbucks at +4%, T-Mobile, General Motors, United Parcel, and Intel Corporation. Please note that the weekend Investing US portfolio may hold some of these stocks.
Tweet Of The Day
The “Tweet for the Day” highlighted the massive scale of digital transactions in India. There was a 100-second gap between two personal UPI transactions. During that 100-second period, 165,000 transactions were processed based on the unique serial numbers that track the transaction time. This means 1,650 transactions are getting processed every second, and this was not even during the peak period of the day, but around mid-noon.
People often focus only on stocks and their specific earnings or valuations, but fail to consider the immense scale of operational change happening in the country, of which UPI’s volume is a prime example. This large-scale change, we believes, is what sustains the Indian market.
