Weekend Investing Daily Byte - 24 Jan 2024

How are the Markets Looking ?

The day started with Nifty opening around yesterday’s low, and the first hour was quite volatile though holding up quite well with some support. However, there was a 200 point fall after the initial surge. This may have caused some apprehensions but Nifty surged very strongly post 12: 30 pm and covered almost half of yesterday’s massive red candle by the end of the day.

If Nifty manages to climb above the resistance at 21550, it could signal that the last couple of sessions were mere minor blips, and the markets may continue to perform well in the near future. However, it is important to note that we must patiently wait and observe how things unfold in the next few sessions.

Nifty Heatmap

The heat map shows that Nifty benefited from the strong performance of HDFC Bank, SBI, Infosys, and Reliance, all of which are heavyweight stocks in the Nifty 50 index. On the other hand, ICICI Bank and Axis Bank were down, representing a contrasting picture.

Sectoral Overview

PSE stocks led the comeback today, followed by metals, PSU banks, commodities, energy, and infra. This indicates a predominantly strong performance across various sectors.

When we analyse the performance of Nifty 50, we can see that it gained about 1%, with most sectors outperforming it. The real estate sector remained relatively weak, while Bank Nifty and private banks were flat to negative, the only sectors in the red zone.

In the last twelve months, the story remains similar, with Real Estate & PSE outperforming other sectors by a significant margin.

Mid-Small & Small Cap Performance

Both mid caps and Smallcaps staged a superb comeback clocking almost 1.7% each today. What has been very encouraging is the quick recovery these lower market cap segments have seen especially after a sharp red candle.

Both the indices show similar chart trajectories having taken support around similar zones. 1700 is a crucial support to watch out for on Mid caps which is 14000 in case of Smallcaps

Nifty Bank Overview

Banknifty has filled the gap as shown in the chart and seemed to have been one of the weakest among all indices in today’s session. Banking stocks saw a mixed bag with ICICI headlining a 2% loss compared to a 2% gain on HDFC Bank. Today’s close is also exactly around yesterday’s close signaling indecisiveness.

Highlights – The HDFC Bank Conundrum

HDFC has been in the middle of a difficult phase having lost almost 15% in Jan 2024 and also having stayed flat for almost 3 years now.

But, what is crucial to note is that the stock has been a massive wealth creator for several investors right since it’s beginning returning a whopping 26% CAGR.

The last three years have been dull for the stock and it’s investors. ICICIBANK has returned a solid 65% whereas the likes of COALINDIA and NHPC which are a part of the same Nifty 50 index have amassed around 270% gains.