The week is ending, and it’s not been a good one today. The day has been very dull and down. Actually, the US markets have started to soften, and now we are following that trend as well. So, you know, except for Hong Kong and a few other markets, I think everything else looks not so bullish right now.

There’s a huge money shift that is happening. Earlier, if you recall, China and Hong Kong markets were absolutely dull for years, and all the money allocation was directed towards markets like India. Now, it is exactly the reverse. In the last four months, the Hong Kong market has risen by more than 20%, and many stocks there are reaching yearly highs. Meanwhile, we are sitting at six to eight month lows on many of them. A dramatic shift has occurred. Of course, a lot of funds had come to India, and perhaps we became overbought, but now that is getting reverted. This process will take its time, and the cycle will play out.

But these are the best times to really build your core portfolios, reset your allocations, and review where your portfolio is heading for the next five to ten years. If your allocations weren’t right, or if you didn’t have hedges in place, once the markets come down, you’ll be able to take a fresh view and position your portfolio better.

Where is the market headed?

Market Overview

The markets are absolutely dull and down. You can see that in the last five sessions, everything has been within a very, very tight range. We are at a point where a big move down could happen, but given the fact that we’ve already lost nearly a thousand points straight down in the last 15 days, a sudden sharp move down seems unlikely. In my opinion, the probability of a big move now lies on the higher side, maybe towards 23,300 or even 23,800. There could also be some moves that may be a “trappy” move, where the lows get broken, and then a swing back happens. So, maybe that’s something potentially in the works.

Nifty Next 50

The Nifty 50 was down by half a percent, while the Nifty Next 50 fell by 1%. It had been rallying hard for two sessions, so some give-up is natural there.

Nifty Mid and Small Cap

Mid-caps fell by 1%, so what we gained yesterday has already been lost. Small caps were down 0.57%, which wasn’t as bad as mid-caps, but still, from the morning high of 15,000, nearly 320 points were lost by close. There’s no major indication of an uptrend, but rather, things are just consolidating where they are right now.

Nifty Bank Overview

The Bank Nifty also looks weak, with a 0.72% loss. In recent sessions, we’ve bounced from this level, and the Bank Nifty has scope to come down and at least retest these lows near 48,000.

GOLD

Gold is down by 0.18%. This is the third session for gold without any significant gains. Despite the rally in the last two months, there hasn’t been a major correction, and it does seem like the bull grip is still strong in the gold market.

Advanced Declined Ratio Trends

Market breadth is decisively towards the red across all indices. Whether it’s Nifty, Nifty 200, or Nifty 500, everywhere there’s a bias towards the shorts.

Nifty Heatmap

Heat maps are expectedly red, with State Bank of India, Kotak Bank, Axis Bank, and ICICI Bank leading the market down. Energy stocks like ONGC, BPCL, and Reliance are down, along with Mahindra and Mahindra, which lost 6%. Tata Motors was down 2.5%. There is talk of EV tariffs coming down, with import duties dropping from over 100% to just 15%. Even though this may only apply to a limited number of vehicles, it could significantly affect the market for high-priced EVs. If Tesla comes into India at a price range of 30-40 lakhs, it may impact Mahindra’s 25 lakh EVs. While the base-level EVs won’t be impacted, which is the market Mahindra and Tata focus on, there is still a knee-jerk reaction, and Mahindra has lost about 15-16% of its market cap very quickly.

Other stocks like Sun Pharma, Dr. Reddy’s, and Cipla were also down. Power Grid and Adani Ports lost ground as well. Some minor gains were seen in Tata Chemicals, Hindalco, Aisha Motors, and SBI Life. Within the Nifty Next 50 stocks, very few were in the green, such as Lodha, LIC, JSW Energy, VBL, and Vedanta. On the other hand, stocks like TVS, Motor Crash, United Spirits, Zomato, Divi’s Lab, Siemens, Mother Son, Bhel, and Bajaj Holding were down for the day. Overall, it was a mixed bag, but with a bias towards the red, as expected.

Sectoral Overview

Sectoral mapping shows that everything is down. Pharma is down by 1.9%, autos by 2.6%, PSU banks, real estate, capital markets, defense, India consumption stocks, oil and gas, and public sector enterprises are all down. The only sector that stood out was metals, which was up by 1%. Commodities were completely flat. So, metals and commodities were the only sectors to buck the trend, with everything else seeing losses.

Looking at the performance over three months, six months, and even the past year, most sectors have experienced losses, with only a couple of sectors standing out. Metals have done better than most other sectors in the last few days, with companies like National Aluminium, Sail, Tata Steel, and Well Sponge making small gains.

Sectors of the Day

Nifty Metal Index

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