Where is the market headed?
The markets are waiting for the Fed’s move, and we will come to know about it tomorrow. The market seems to be taking it calmly, assuming there will be no adverse news. In the previous video, we had shown that interest rate cuts don’t really gel well with markets going up in the short to medium term. Of course, in the long term, markets take their own course. But in the short run, the trigger at which the rates get cut matters.
For example, if the expected rate cut is 0.25% and the Fed actually cuts by 0.5%, the American markets may fall because that would signal a desperate situation. On the other hand, precious metals and emerging markets may get a pop-up since more funds could move there instead of the U.S. So, these short-term plays are possible, but overall, reducing interest rates do not give a very positive impact on markets.
Market Overview
Looking at the markets today, it was a clean bar with the low of the day being the same as the open of the day. Such candles usually mean that level becomes strong support. In past instances, when the open and low were the same, the markets moved up sharply. Today also, we crossed an important pivot of 25,150.
The Nifty closed 0.68% higher, which is a nice rise.
Nifty Next 50
Nifty Junior went up 0.58%.
Nifty Mid and Small Cap
Midcaps rose 0.62%, Small caps gained 0.74%.
Bank Nifty
Banks added 0.47%. While banking stocks have been a bit slower, overall everything is moving nicely.
GOLD
Gold also gained another 0.48%. In dollar terms, it is very close to $3,700 at $3,699 as of now. The converted price in India is around ₹11,096 per gram, but due to a premium of ₹4,000 per 10 grams in the market, buyers actually pay around ₹11,500. That’s quite high given that prices were just ₹9,800 less than a month back.
This rally along with the premium suggests a possible structural breakdown in global gold markets. Deliveries seem short, and while it may be early to say, this could snowball into a major situation where demand outstrips supply and gold rises dramatically.
Advance Decline Ratio
The advance-decline ratio was steady with 326 stocks advancing and 174 declining, giving the market a reasonably green look.
Heat Maps
Bharti Airtel, L&T, Mahindra, Maruti, Kotak Bank, and Axis Bank all did well. Among IT names, TCS, Wipro, Tech Mahindra, and Infosys were in focus. Infosys has been spending ₹18,000 crore on buybacks, but the stock is not showing much strength. The market cap has only gone up 3–4% since the announcement, making it look like wasted money.
In the Nifty Next 50, Swiggy, Hyundai, JSW Energy, Motherson, Vedanta, Bajaj Holdings, Chola Finance, and Tata Power moved up strongly. On the losing side, VBL, Adani Power, Godrej Consumer, Dabur, and Naukri fell.
Mover Of The Day
The biggest mover of the day was Redington, which jumped 20% suddenly, catching everyone by surprise. This looks like it came on some unexpected news.
Sectoral Overview
Sectorally, Autos took the lead again. Just a few days back, autos were leading, then faded, and now they are back. Real estate also did well. There is hope that if the U.S. cuts rates, India will cut later too, which will help home loans and EMIs. Infrastructure, manufacturing, CPSE, Energy, PSUs, Metals, Oil & Gas, and Commodities all gained 0.8–1%. It was a broad-based gain day. The market seems unwilling to go down and is showing positivity.
Sector of the Day
Nifty Auto Index
Tweets Of the Day
Another important news today was that the CBI filed a charge sheet against brokers in the NSE colocation scam. This is surprising because NSE was close to settling with SEBI by paying around ₹1,300–1,400 crore. The media was suggesting settlement within two months and an IPO in 8–9 months. This charge sheet now opens up a Pandora’s box. What happens to the IPO? Is NSE itself named or just brokers? Could there be forces that don’t want the NSE IPO to happen? This is very surprising and worth watching.
