Where is the market headed?
There is currently no respite in the markets as they continue to slip, with some sectors falling significantly harder than others. Today saw a renewed downward movement in the large-cap space, while the mid and small-cap segments were largely spared.
Big names like HDFC Bank and, more recently, ITC have been facing significant pressure, and the changing patterns suggest these major counters are being demolished. With heavy selling on these large-cap stocks, the market currently has very little to hang on to.
Although the budget is only two weeks away, there is no narrative of positivity being built around it yet. The primary overpowering narrative remains the American tariff deal, with no thawing of negotiations in sight. Instead, new tariff issues seem to surface daily, creating a bleak outlook. However, there are seasons in the market where such phases must be endured.
On a brighter note, the precious metals universe, along with metals and commodities, is performing extremely well. Oil has also started to move up, proving that there is always a bull market happening somewhere. Proper asset allocation ensures that even in these times, certain parts of a portfolio can remain buoyant.
World Gold Council estimates suggest that Indian households hold approximately 30,000 tons of gold. Based on a methodology that estimates holdings between 25,000 and 35,000 tons, a mean of 30,000 tons at current prices—nearing 1.5 lakh rupees per 10 grams—translates to 450 lakh crore of wealth. This figure represents only private household wealth and excludes holdings by temples, the RBI, or other institutions. In USD terms, this is approximately $5 trillion. To put this in context, the entire Indian stock market—including promoter, government, and institutional holdings—is also valued at roughly $5 trillion. While households hold about $1 trillion in stocks, they hold $5 trillion in gold, showcasing a massive contrast in wealth distribution.
There is significant discussion suggesting that by 2027, gold could reach $8,000. If this thesis holds and the USD/INR exchange rate remains between 90 and 100, the potential value of this household gold wealth could soar to $9.3 trillion. This is already creating an enormous wealth effect across the country, benefiting even the poorest individuals. We are witnessing a generational change in the global monetary system.
Market Overview
Regarding market direction, the Nifty moved within a 200-point range today, with a low of 25603 and a high of 25791. The candlestick pattern shows a pin bar with a very small body, indicating no sustainable effort to break out of the current short-term and mid-term downtrend. The Nifty fell 0.26%, while the Nifty Junior gained 0.39%.
Nifty Next 50
Nifty Mid and Small Cap
Mid-caps rose 0.21%, and small-caps performed slightly better at 0.48%, moving off a recent double bottom. While short-term trends for small-caps have turned positive, the mid and long-term outlook remains negative.
Bank Nifty
The Nifty Bank closed flat, maintaining a positive mid and long-term trend.
GOLD
Gold and silver remain extremely buoyant, with gold up 1% at 14250 per gram and silver jumping 4.3% to touch $91. While the official silver price is 278000, market prices are higher due to GST and premiums.
SILVER
Advance Decline Ratio
The market heat map was largely red today, with advances taking a backseat after noon.
Heat Maps
Significant cuts were seen in TCS, Maruti, Hindustan Lever, and Asian Paints. Major banks like HDFC, ICICI, and Kotak all lost approximately 1.3%. Conversely, Axis Bank, ONGC, and Tata Power saw some gains. In the Nifty Next 50, PSU banks, commodities, and metals showed strength, while stocks like Naukri and TVS Motors faced downward pressure.
Mover Of The Day
MMTC was the mover of the day, rising 12.6% amid rising gold and silver prices, though it remains a highly volatile stock.
Sectoral Overview
Sectorally, metals led the way with a 2.7% single-day move, followed by PSU banks at 2.1% and commodities at 1.5%. Over the last month, metals, PSU banks, and defense have been the top performers, while FMCG and real estate have struggled.
Sector of the Day
Nifty Metal Index
Metals like Hindustan Copper and Tata Steel are currently at new highs, reinforcing the importance of staying with the trend.
U.S. Market
In the US, the Dow Jones saw a steep 0.8% cut, with stocks like Salesforce, Adobe, and Visa falling significantly. Visa has been impacted by news of a potential 10% cap on interest charges, while big tech names like Meta and Microsoft also saw losses. In contrast, Intel and AMD recorded strong gains.
Tweet Of The Day
Finally, a look at the Japanese Yen reveals a critical “line of control” at 160 against the US dollar. Despite Japanese yields rising dramatically to 3.5%, the Yen is weakening rather than strengthening. If this continues, the Japanese central bank may be forced to dump U.S. Treasuries, of which they hold about $1 trillion. This could lead to a violent unwinding of the Yen carry trade, a key element in global capital movement. This “chicken and egg” problem is a major factor to watch in the coming weeks.
