Where is the market headed?
Last night, a truce was declared between Iran and Israel, with a ceasefire officially announced. Though some bombing reportedly continued after the announcement, the situation appears to have calmed. This was reflected in oil prices, which fell sharply from nearly $80 to below $70, and gold, which dropped from over $3380 to around $3319. These price movements often signal developments well before official confirmations.
With the Iran conflict seemingly behind us, Indian markets opened strong, rising over 1% and attempting to break out of their range. However, the second half saw a reversal, with most gains lost—leaving the market in a state of indecision despite its upward bias.
Market Overview
On the Nifty chart, the index hit a high of 25,317 but closed at 25,044, losing nearly 270 points from the top. Despite the strong start, it ended the day only 0.29% up, reflecting a clear pullback from intraday highs.
Nifty Next 50
Nifty Junior up 0.85%
Nifty Mid and Small Cap
Mid-caps closed 0.71% higher after a gap-up start
Small-caps followed suit with a 0.78% gain, both showing steady upward momentum through the day.
Bank Nifty
Nifty bank up 0.72%
GOLD
Gold saw a sharp decline of 1.86%, dropping to ₹9,721 per gram, down from recent highs of nearly ₹10,100. This steep correction suggests that gold may now enter a consolidation phase for the next couple of months.
Advance Decline Ratio
Advance-decline ratio was reasonably strong at 358 advances to 143 declines, indicating broad market strength.
Heat Maps
The Nifty heat map showed a mixed picture, with notable gains in Adani Ports, Tata Steel, Grasim, Jio Finance, Shriram Finance, and Kotak Bank, which was up by 1.8%. Overall, the banking sector held steady, supporting broader market sentiment.
On the downside, ONGC fell sharply by 2.9% in line with collapsing oil prices. FMCG, Power, and infrastructure sectors continued to show sluggishness.
In the Nifty Next 50 space, there was broad-based strength. Hyundai, TVS Motors, and Indigo stood out—Indigo in particular gained from Air India’s service disruptions, potentially capturing 5–10% of market share. Ambuja Cement rose 3.5%, and Canara Bank also saw positive momentum.
Sectoral Overview
The sectoral landscape was mixed today. India Defence stocks fell 2.4%. Central Public Sector Enterprises were down 1.2%, while media stocks, after yesterday’s rally, corrected by 1.1%.
On the positive side, PSU Banks continued their strong performance and gained 1.46%. Tourism stocks rose 1.24%, and Nifty Metals added 1%. Other sectors remained largely range-bound with no major moves.
Sector of the Day
Nifty IND Defence
India Defence stocks took a sharp hit, falling 2.4%, with names like Garden Reach (–8.7%), BEML (–6.7%), Astra, Paras, and Mishra Dhatu also declining. The daily candle showed a complete bear engulfing pattern, signalling a failure to break out of the range and potential signs of consolidation or distribution.
Nifty PSU Bank Index
PSU Banks gained 1.46%, bouncing off a key support level with a strong gap-up open. Union Bank, Canara Bank, Bank of Maharashtra, Indian Overseas Bank, and UCO Bank led the rally.
Story of the Day: India vs the World: What a Decade of Global Market Data Reveals
One of the most common questions in global investing is: which country performed best in the last decade? Is global diversification necessary? Can India be relied on for concentrated long-term bets? What if India faces a Japan- or China-like stagnation? To address these, a study was conducted comparing major global indices—including the US, India, Germany, Japan, China, Brazil, and others—normalised in USD terms. For context, gold was also included in the comparison to benchmark equity performance.
The results were eye-opening. The US topped the list, with a 186% gain over the decade, followed by Germany at 137% (see the image below).
India secured third place with 111% gains. Surprisingly, gold outperformed all equities with a return of 199%. Meanwhile, China, Hong Kong, and South Korea delivered negative or negligible returns, and Brazil barely returned 3% over 10 years. This shows that even growing economies like China can deliver underwhelming market returns due to factors like geopolitics, policy, or investor sentiment.
A year-wise quilt chart further revealed that while India has been a strong performer overall, it has experienced inconsistent year-on-year returns.
In contrast, the US remained consistently in the top half of performance rankings, barring 2022. Gold too, while not always a top performer, maintained a scattered yet steady presence across the years, making a case for gold as a stable diversifier.
In terms of CAGR, India’s 7.7% in USD terms stands well above the likes of China and Hong Kong, but lags behind the US (11.1%) and Germany (9%) (see the image below).
This positions India as a solid but not exceptional performer. The key takeaway here is the importance of geographic and asset diversification. While India’s long-term story remains intact, no market is immune to stagnation. China’s flat performance despite its strong economy is a stark reminder.
Lastly, the data highlights that gold isn’t a ‘dead’ investment. With a 10-year CAGR of 11.6%, it has outpaced equities in many countries. Historically, portfolios with gold exposure weathered prolonged equity underperformance much better, including during Japan’s lost decade and China’s recent stagnation. For Indian investors, a balanced allocation across Indian equities, select international exposure (like the US), and gold could offer a resilient, diversified portfolio.
As global dynamics shift and cross-market performance unfolds, the key question remains: Can India maintain its upward momentum, or will history repeat itself with a stagnant decade? Do SHARE your thoughts in the comments—how are you positioning for the next decade?
