Where is the market headed?
As expected, the US Federal Reserve announced a rate cut of 25 basis points. The Fed made it clear that this cut was not the start of a long-term rate reduction cycle, but more of a risk management step, mainly to address the weakening labor market. Jobs data has been worrying, with unemployment at multi-year highs, and that has been at the center of this move.
The market reaction in the US was mixed, with the Dow Jones doing better, while the Nasdaq and S&P 500 closed flat to slightly negative. But if we look at the bigger picture, the S&P 500 has been on a steady rise for five straight months and is likely to close this month on another positive note. Despite concerns over trade wars, the US markets have shown stability.
Market Overview
Coming to the Indian markets, Nifty closed 0.37% higher today at 25,423. The day started strong with a gap up, and for the first half of the day, it stayed flat. However, in the afternoon, sellers started to put pressure, and Nifty moved lower. But in the last one hour, Nifty found support and staged a solid comeback, closing near the day’s opening level.
Nifty Next 50
The Nifty Next 50 index ended 0.27% higher.
Nifty Mid and Small Cap
The Midcap index was up 0.31%. Small caps also showed strength, though they faced some pressure near the 17,500 level. Encouragingly, all these indices are now above their key moving averages, and if the momentum continues, new highs could be possible by Diwali.
Bank Nifty
The Bank Nifty was also up 0.42%, regaining its moving average.
GOLD
In commodities, gold has been making noise after a strong rally past the 11,000 mark. Today it gained another 0.8%. But with equity markets performing well, gold might face some selling pressure near these levels.
Advance Decline Ratio
On the breadth side, the advance-decline ratio was almost evenly split, showing the market’s mixed mood through the day.
Heat Maps
Looking at stock performance, Zomato stood out with a 2.92% gain, while banks like HDFC Bank and Axis also added strength. Pharma stocks had a strong day with Sun Pharma leading the pack, and IT stocks like Infosys, HCL Tech, and Wipro also supported Nifty. On the weaker side, ONGC, Coal India, and Tata Motors faced some selling.
Within the Nifty Next 50, Hyundai gained 2.64% and LTIM was up 1.87%. Some Adani group stocks also saw mild gains.
Mover Of The Day
The star mover of the day was Bajaj Consumer, which rallied 8.59% and hit a 52-week high, continuing a strong uptrend from the last few months.
Sectoral Overview
Sector-wise, pharma and IT led with gains of 1.5% and 0.83% respectively. Services, financials, and private banks also contributed positively. On the losing side, defense, energy, and media recorded small losses of up to 0.5%.
Sector of the Day
Nifty Pharma Index
Pharma stocks like Biocon, Natco, Glenmark, Mankind, and Laurus Labs performed especially well and are showing signs of recovery after earlier weakness.
Global Context
Many investors often compare Nifty with the S&P 500, but it is important to account for currency depreciation. When adjusted against the USD, Nifty’s returns over the years reduce significantly compared to its raw numbers.
In the last 12 months, adjusted for currency, India has actually been among the weakest markets, with Nifty down 4.8% and Nifty 500 down 6.5%, while China has gained over 50%. However, in the longer-term view, Indian markets remain strong compared to most global peers. Momentum charts also show how Brazil has surged recently, while markets like Canada and the US have slipped. India, though near the bottom short term, is showing early signs of recovery.
Tweets Of the Day
