Weekend Investing Daily Byte - 16 Jan 2024

Over the past five years, the Nifty index has soared by an impressive 100%. However, it is important to assess whether your portfolio has experienced similar growth. I recently posed this question on Twitter and the Weekend Investing app, urging investors to reflect on their investment strategy and outcomes. If you haven’t achieved a 100% return, it’s crucial to understand the underlying factors that have hindered your success.

Finding out why your portfolio has not performed as expected is the first step towards rectifying the situation. Whether it was due to trading episodes, discretionary issues during the COVID-19 market fall, or lack of a solid investment strategy, identifying the root cause is paramount. Our team at Weekend Investing is more than willing to help you analyse your investment journey and provide guidance on how to achieve better results. Together, we can uncover strategies to maximise returns and ensure a prosperous future.

One significant point to note is that doubling your capital in the last five years should not have been arduous, particularly for those associated with Weekend Investing. The goal is to consistently outperform the market and generate substantial returns. So, it’s imperative to undertake this internal assessment, identify any hindrances, and utilise the expertise available to overcome them.

How are the Markets Looking ?

Now, let’s discuss the state of the market in the past week. The Nifty index experienced relatively stable trading, consolidating within a similar range as the previous day. The positive aspect is that it did not approach or close the gap. A stronger bearish sentiment would have resulted in a decline that closed the gap. However, we find ourselves on fairly positive ground, indicating a favourable market trend.

Nifty Heatmap

While the heat map displays primarily red shades, symbolising profit booking, it’s essential to note that it is not indicative of a market downturn. NTPC declined by 1.8%, while Divis Lab, Reliance, and TCS experienced marginal drops ranging between 1% to 2.4%. On the flip side, the metals industry showcased some positive movement, with JSW Steel, Tata Steel, Titan, and Tata Motors showcasing upward trends. Additionally, BPCL and ITC witnessed gains of approximately 1%. Other sectors remained relatively flat.

Sectoral Overview

The real estate sector witnessed some profit booking with a decline of 1.7%, while the IT and pharma sectors experienced mild downturns of 1.3% and 1%, respectively. The energy and infrastructure sectors also observed minor declines. Overall, the Nifty index closed the day with a 0.3% decrease.

Over the past week, most sectors have displayed a slight upward trajectory. The metal industry experienced a 1% increase, contributing to overall positive market sentiment.

Mid-Small & Small Cap Performance

However, there was a significant drop in the small-cap index during the second and third hours of the trading session. Although some recovery was seen, profit-taking persisted, affecting mid and small-cap indices as well.

Nifty Bank Overview

This consolidation phase is not uncommon, as after a sustained upward movement, the market tends to stabilise at a certain level. Nifty Bank, for instance, has been hovering around 48,000, waiting for strong results or positive news from the banking industry, such as improved margins or reduced NPAs, to push it higher.

In terms of news, HDFC Bank recently released better-than-expected results after market close. Such positive developments have the potential to propel the market forward.

Highlights – Dredging Corp

Moreover, some public sector enterprises have experienced significant stock movements, such as Dredging Corporation which has gone from 640 to 840 in 2 days. (Disclaimer: WeekendInvesting is holding this in one of its strategies).