Where is the market headed?
The day began with news that U.S. President Trump announced a potential additional 25% duty on any nation trading with Iran. India maintains significant trade relations with Iran, totaling approximately $1.68 billion annually. This bilateral trade primarily involves the export of basmati rice, tea, sugar, pharmaceuticals, and pulses, while imports consist of dry fruits and nuts, with very minimal crude oil imports.
This latest duty threat caused the market to go into a tizzy during the first half of the day, though it eventually recovered to ensure no significant ground was lost by the close.
Market Overview
The markets are currently reeling under this uncertainty, but the long-term outlook remains hopeful. Looking at the charts for the day, the Nifty saw a wide range of movement between a low of 25600 and a high of 25900. Despite this 300-point swing, the index ended with a slight drop of 0.22%. Support appears to be forming around these levels, and the long-term trend for the Nifty remains positive.
Nifty Next 50
Similarly, the Nifty Junior was down 0.26%, and Mid-caps fell 0.14% in a very flat session, though their long-term trajectory also stays positive. Small caps managed to rise 0.64%, even though momentum trends are pointing downward.
Nifty Mid and Small Cap
Bank Nifty
The Nifty Bank saw a gain of 0.22%, maintaining a positive mid and long-term trend.
GOLD
In the commodities space, gold saw a minor dip of 0.17%, with the price for 10 grams in India sitting at 140,000 rupees. Gold is becoming increasingly expensive, and all trends for the metal remain positive.
SILVER
Silver is also gaining, with the official price at 262,880 rupees per kg.
Advance Decline Ratio
The advance-decline ratio remained flat, indicating that the market stayed relatively balanced between gains and losses throughout the session.
Heat Maps
Specific stock movements showed Reliance dropping 2% on unconfirmed news regarding a potential halt to their lithium-ion battery project. L&T lost 3%, while ITC continued its downward trend with a 1% drop. Hindustan Unilever fell 0.6%, and both Maruti and Mahindra saw declines.
Conversely, stocks like ONGC, Grasim, and ICICI Bank helped prop up the Nifty. In the Nifty Next 50, gainers included Vedanta, Hindustan Zinc, Trent, VBL, LTIM, and Naukri. On the downside, DLF continued to fall following news from another real estate major regarding missed guidance, while IRFC and Chola Finance saw marginal dips.
Mover Of The Day
Omaxe emerged as a top mover, surging 12.69% after announcing a 500 crore investment in a project in Ludhiana.
Sectoral Overview
Sectoral trends showed strength in the capital markets, which have become a favorite over the last two days. News that the NSE may soon receive IPO approval has driven up stocks like BSE Limited, Motilal Oswal, Nippon Life, Angel One, and Aditya Birla. PSU Banks, Media, and IT also saw gains of over half a percentage point.
On the other hand, infrastructure and defense sectors struggled, which is surprising given the proximity to the budget. Real estate fell 0.6% and tourism dropped 0.5%. Infrastructure was weighed down by losses in L&T, Godrej Properties, Reliance, Interglobe Aviation, and Indian Hotels, collectively falling 1.14%.
Sector of the Day
Nifty Infrastructure Index
Nifty Capital Market Index
U.S. Market
In the U.S. markets, the S&P 500 saw gains of 0.15% and the Russell 2000 rose 4.44%, while the Dow and NASDAQ remained flat. However, several individual stocks were hit hard. Intel dropped 3% following a previous 10% surge, and Citigroup also fell 3%. American Express and Capital One faced pressure after President Trump suggested limiting credit card interest charges to 10% for one year. In the NASDAQ 100, stocks like AMD, Tesla, and Google saw gains, while Meta fell 1.7%. These market movements are monitored closely as part of various investing strategies, though they do not constitute formal recommendations.
Tweet Of The Day
The current financial climate has sparked a significant increase in awareness regarding asset allocation. A recent anecdote involving a long-term investor with a portfolio heavy in IT stocks—such as Infosys and TCS—highlights a growing trend of investors wanting to shift toward gold. While some may view this as “fear of missing out” due to the rapid rise in precious metals, it points to a broader realization that diversification beyond equities is essential.
Over the last 30 years, the focus on asset allocation has never been higher than in the past year. Indian Gold ETFs are now among the top 20 in the world for new units, yet the global retail mania for gold has arguably not even begun, as seen by the relatively low tonnage in the world’s largest gold ETF compared to 2011 levels.
Looking ahead, the potential for growth in precious metals remains vast. Estimates suggest that total private wealth is around $350 trillion, with less than 1% currently allocated to gold. Financial institutions like Morgan Stanley and Goldman Sachs are now suggesting that investors should hold as much as 20% in gold, a significant jump from previous recommendations of 5%. Even a small shift of 2% of global private wealth into precious metals would represent a $7 trillion movement.
While some fear that gold and silver have already peaked, others believe this could be the start of a decade-long rally. Understanding these shifts is crucial, as many investors fail by focusing on the wrong metrics.
