How are the Markets Looking ?
The stock market has been on a bullish run recently, with the Nifty crossing the 22,000 mark and continuing its upward trajectory. In just four sessions, the market has gained 600 points, reaching new highs. Even though the US markets were closed on this day, the Indian market showed no signs of slowing down. In fact, it seems to be leading the way for a potential breakout in the US markets as well. The Indian market is making higher lows and higher highs at each point.
Nifty Heatmap
Despite concerns of certain sectors being overheated, the market has proven that it can remain irrational for extended periods. Some notable stocks that performed well during this period include HDFC Bank (+2%) , Infosys (+2.5%) , Vipro (+6%) , HCL Tech (+3%) , TCS (+0.5%) , Reliance (+1.7%) , ONGC (+4.5%) , Bharti Airte (+2.5%) l, NTPC , Power Grid, Hindustan Levers, and Maruti. These companies have seen significant gains ranging from 1.7% to 6%, indicating the overall positive sentiment in the market.
Sectoral Overview
In terms of sectoral performance, IT stocks, public sector enterprise stocks, energy stocks, infrastructure stocks, pharma stocks, and PSU banks have all shown growth. On the other hand, metals, real estate, autos, and FMCG stocks have remained relatively flat. Real estate, in particular, has seen impressive gains of 15% in the last month, outperforming other sectors.
Mid & Small Cap Performance
Furthermore, mid-cap and small-cap stocks have also seen a rise. Mid-cap stocks have seen a gradual increase, closing at a new high of 47,800, while small-cap stocks opened with a gap up, came down, closed the first gap, attempted the second gap, and ultimately closed at a new high as well. This indicates that the broader market is gradually moving up, showing positive sentiment for investors.
Nifty Bank Overview
The Bank Nifty has also experienced a positive run, with four sessions of upward movement. Although it hasn’t broken out yet, it seems to be on track for further growth.
Highlights – Rail Stocks
Some stocks that have seen significant price movements include MRPL, MRPL saw its stock rise from 132 to almost 188 in just four sessions and cooled off at the end of the day at 169. This is on the back of the news that government is not reducing petrol prices right now
While Rail Vikas Nigam increased from 184 to 230, Indian Railway Finance Corporation also experienced an uptrend, rising from Rs100 to nearly Rs130. These significant price movements indicate the momentum and rally that is happening in various public sector stocks.
It’s important to note that many of these sectors and stocks may not seem investable based on traditional valuation metrics or historical earnings. However, this is how the market operates. When stocks move in such unconventional ways, it can be a situation of disbelief for most investors, leading them to either sell out or stay on the sidelines. This lack of resistance further fuels the momentum, as there are fewer sellers and no buyers burdened with inventory. This freeride upward can be seen as a great opportunity for stocks to fly when additional liquidity enters the market.
Highlights – Nifty IT
The Nifty IT index has also seen a significant increase, following the trend of the Nasdaq, which is also nearing its all-time high. This correlation further supports the positive trend in the market.
Although it’s crucial to be cautious at times, it’s also important to consider the journey of the market from previous lows. Many investors have been waiting on the sidelines, hoping for more favourable valuations or a significant market downturn. However, these theories and narratives are often just figments of imagination, as the market’s wisdom often defies expectations. The market’s upward trend may be difficult to explain, but it’s essential not to question it and instead align with the trends and take advantage of buying opportunities when the market is up and selling when it comes down.
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