Where is the market headed?
A very interesting new industrial index series has been launched. This update shifts the base year from 2011-12 to 2022 and introduces a complete restructuring of the items included in the industrial index. Outdated items have been removed, while modern products coming into practice, such as solar energy, renewable energy, and LED bulbs, are being added to the IIP series.
Alongside this structural change, the IIP index for the month of April stands at 4.9%, which is better than expected and suggests that manufacturing growth is picking up in India. This brings a positive note for the day on the second of June. Please ensure you read the disclaimer before diving into the market charts.
Market Overview
The Nifty started the session on a very poor note, dropping down to 23229, but it managed to end reasonably all right at 23483, marking a 0.43% gain for the day.
Broader Market Indices
Other indices also jumped up, with small caps rising half a percent, Nifty Next 50 gaining almost a quarter percent, mid caps increasing by 0.18%, and Nifty Bank closing up 0.13%. Gold has also jumped up today, recording a 1.33% increase to reach a weight of 15,955 per gram.
GOLD
Gold is currently consolidating rather than dropping off, and whenever the next move starts, it could be a very gigantic move, making it perhaps a good time to gradually keep buying gold.
Crude Oil
Meanwhile, crude oil came off by 1.42% after a sharp spike over the weekend. The jury is still out on how and when this war will come to an end, as there is currently no agreement on the table, and both sides will continue working towards it according to the current narrative.
Heat Maps
IT stocks, which were a dark horse, have suddenly come up very strongly over the last two to three sessions, with TCS, Infosys, and HCL Tech all doing really well. The rest of the market remained reasonably stagnant for the day. Adani stocks recovered a bit, and there were also some gains in DLF, MotherSon, LTM, United Spirits, and VBL, among others.
Movers Of The Day
In the mover of the day segment, Wockhardt experienced significant movement. After running up massively from 1600 levels to 2400 levels in just five sessions, the stock has come off 9% today amidst profit booking. However, there is an FDA approval of a new drug that is likely to give them a market of a billion or 2 billion dollars going forward, meaning this correction could perhaps be a good time to accumulate the stock.
NIIT is another stock that has been running up, moving from 68 to almost 92 over two sessions, which is likely a pre-earnings sort of move.
Sectoral Overview
Sectoral trends are basically all flat within plus or minus 1%, except for Nifty IT which is up 4.32%. With this movement, Nifty IT has now recovered almost all its losses over the last one month and is down only 1.9% for the period. Metals and pharma are still performing the best on the one-month chart.
Sector of the Day
Nifty IT Index
Within the IT space, TCS, Infosys, Coforge, HCL Tech, and LTM have done very well. While the sector is performing well, it is coming off a very, very steep trend off from the month of February, and the highs of April will be the real test to see whether it will be able to break those levels or not.
U.S. Market Updates
The previous session of the US markets was very strong, featuring Arm Holdings up 15%, Datadog up 12%, and Zscaler up 11%. Cadence and Thomson Reuters were also up, gaining 10% and 8% respectively. The NASDAQ rose 0.6%, while the S&P and Dow remained flat, and the Russell was down 0.5%. Over just the last one month, the NASDAQ is up 10% and the S&P is up 5%.
Looking at the last 12 months, the NASDAQ is up 40% and the S&P is up 27%, representing huge returns from the US markets. Within the NASDAQ 100 heat map, Nvidia, MU, and many other stocks did really well, while Amazon, Tesla, Meta, Google, AMD, and Apple, along with Qualcomm and Intel, took a back seat and experienced some profit booking.
Tweet Of The Day
An encouraging tweet of the day came from Jensen Huang, the CEO of Nvidia, who stated that all fears regarding AI cutting software engineering jobs are complete nonsense. This perspective is exactly what is leading to a revival in the Indian IT software space.
According to him, more and more engineers will be required, and hiring is rising, which directly contradicts the earlier narrative that companies were laying off workers and software jobs would be extremely difficult to get. Given that he is the goat of the AI space, if he says it is complete nonsense, it is best to believe that it is indeed complete nonsense.
