Where is the market headed?
Wishing you all a very happy Diwali! The festive spirit has clearly lifted the mood in the markets. Over the past few sessions, we have seen a strong surge in stocks, driven by positive sentiment and optimism. The hope that Indo-US tariffs will soon be resolved has added to the enthusiasm. Consumer spending has also been remarkable, with massive car and mobile sales during Dhanteras. Every marketplace has been buzzing, showing that Indian consumerism remains strong and steady. Corporate earnings have also come in better than expected, adding to the upbeat tone.
One major piece of news that boosted sentiment was the direct investment in RBL Bank, which has sparked optimism for more such inflows into smaller private banks. Overall, the markets are in a bright, cheerful mood.
The Nifty is now very close to its all-time high, while the Bank Nifty has already hit a new record. Mid and small caps are still lagging but seem to be setting up for their next move.
Gold and silver have cooled off slightly over the past two days, though the broader rally still looks intact. The Nifty has now been in the green for four consecutive days, showing solid strength this October — a month that usually tends to be volatile.
Market Overview
Today, Nifty gained 0.5%, while the Nifty Junior was flat, and midcaps rose 0.6%. Small caps were also slightly up, though still behind the larger indices.
Nifty Next 50
Nifty Mid and Small Cap
Bank Nifty
The Bank Nifty closed above 58,000, up 0.55%.
GOLD
Gold remained flat, up just 0.17%, but importantly, it hasn’t had two consecutive down days in a while.
SILVER
Silver, too, has been steady around the ₹75,000 mark, holding on to most of its gains.
Advance Decline Ratio
The advance-decline ratio for the day looked encouraging, ending with 289 advances and 210 declines.
Heat Maps
Reliance led the rally with a 3.53% gain after strong results, followed by Bharti Airtel at 1.96%. State Bank, Bajaj Finserv, Axis Bank, and TCS also performed well. However, ICICI Bank and HDFC Bank saw muted reactions post-results.
In the Nifty Next 50, Adani Power continued its strong run, while PSU banks like Bank of Baroda, PNB, and Canara Bank were on fire. Cement and commodity stocks saw some profit-taking, with names like Hindalco, Voltas, D’Mart, and Varun Beverages among the losers.
Mover Of The Day
Among the big movers, Tejas Networks plunged 8.48% after weak quarterly results, continuing its downtrend from previous months. On the other hand, South Indian Bank jumped 16% after strong earnings, rising from ₹28 to ₹38 in no time. The RBL Bank deal seems to have sparked re-rating in the smaller bank space, leading to fresh buying across PSU and private banks.
Sectoral Overview
Sectorally, PSU banks were the stars, up 2.87%, followed by oil and gas at 1.4%, infrastructure at 1.3%, and IT at 0.98%. Nifty Auto was marginally down at 0.16%, possibly due to some profit booking after strong festive sales. The PSU bank index, in particular, looks very strong and appears to be forming an inverse head-and-shoulder pattern, hinting at a potential breakout. It may soon take out the 2024 election highs.
Sector of the Day
Nifty PSU Bank Index
U.S. Market
In the US, markets also remained firm in the previous session. The S&P 500 and Dow Jones both advanced, while Nasdaq 100 gained and small caps slipped slightly by 0.6%. Despite political protests against Trump, the markets remained unaffected.
American Express surged 7%, Gilead gained 4.2%, Capital One rose 4%, and Tesla advanced 2.4%. The sentiment remains positive across global equities.
Tweets Of the Day
In an interesting observation, the silver ETF prices have diverged sharply from physical silver. Many investors who bought ETFs between October 9th and 14th are now facing losses of 20–30%, even though silver prices haven’t dropped. This gap is due to market premiums and highlights how paper silver can be misleading. People often try to save 3% GST by avoiding physical gold or silver, but in reality, the ETF’s annual charges of 0.7–0.8% over several years cost much more. This proves that saving a little on tax can turn costly in the long run.
Another surprising report revealed that jewelry sales hit ₹85,000 crore on Dhanteras and may reach ₹1 lakh crore by Diwali. Many had assumed that high prices would hurt demand, but clearly, that’s not the case. It could also be that pent-up demand from the past few months came together during this festive period. Either way, demand remains strong, supply is tight, and the fundamental demand-supply gap continues to support precious metals. Even if we see some consolidation or profit-taking, the long-term rally remains intact.
