Where is the market headed?
The markets today were really not doing much and actually slipping a bit. There is still some hope as Piyush Goyal and our Finance and Foreign Minister Mr. Jaishankar are in the US holding talks. People are expecting that some negotiations may happen and that is where the current hope lies. But overall, the markets look completely done. There is absolutely no interest to go up right now.
Commodities are running hard and, very surprisingly, PSU banks are also running very strong. In fact, the PSU banking index is near a new all-time high. So, there are still some green shoots within the market. Autos have been doing well recently too. But overall, it is still a lethargic move in the market, perhaps waiting for some clarity on the tariff situation and the H1B impact on IT services.
Market Overview
For the fifth day in a row, the market has shown red. There is perceptible weakness, especially in the last two days. Earlier, the markets used to recover post-noon, but this time it has not happened. A sense of disappointment seems to be building up.
Nifty was down 0.45%.
Nifty Next 50
Nifty Junior saw big cracks, falling 1.2%.
Nifty Mid and Small Cap
Midcaps lost 0.88% and small caps slipped 0.55%. The resistance that we had in June, July, and August seems to be holding again.
Bank Nifty
Nifty Bank was also down 0.7% despite PSU banks trying to support it. So, there was red all over the place.
GOLD
Gold remained flat at 0.01%, though it has already gone up a lot in the last one month. Even a 5% fall from here would not be surprising. Currently, gold is trading at its all-time high of 11,384 per gram.
Advance Decline Ratio
The advance-decline ratio also showed weakness, with 363 declines compared to just 137 advances.
Heat Maps
That explains why the Nifty heat map was mostly red. Autos that were running very hard saw profit booking. Private banks were down, some PSU banks also slipped, and Adani stocks that were rallying earlier came under heavy selling. IT stocks continued to bleed. Reliance and Bharti were down, ITC lost ground, though L&T managed a small 0.4% gain. UltraTech Cement also fell.
The Nifty Next 50 saw even bigger cracks. Adani Power dropped a huge 11% today. Adani Green was down 3%, and other Adani group stocks also corrected. DLF lost 3.3% and Motherson slipped 3.6%. This looks similar to what we discussed a few sessions ago — rate cuts are generally seen as positive for markets, but often post rate cuts, markets tend to fall. Perhaps that is what is playing out now. TVS Motors, HAL, Swiggy, Dr. Reddy’s Lab all declined. Pidilite, however, gained 2% after its split and bonus issue. Canara Bank and Bank of Baroda also managed small gains.
Mover Of The Day
Adani Power was the mover of the day, but not in a good way. After jumping from 125 to nearly 180 post split, it fell sharply and closed at 144.
Policy Bazaar also dropped during the day after IRDAI advised insurers to cut commissions and distribution costs, but later recovered a bit.
Sectoral Overview
Sectoral trends were mostly red. FMCG and CPSE stocks saw minor gains but real estate was the worst hit, falling 2.4%. Capital markets fell 1.4% amid rumors that SEBI may scrap weekly expiries. Defense slipped 1.1% and autos fell 1.15% after a strong run in the last month. On a monthly basis, autos had gained 6.6% while metals rose 7.3%. Energy, private banks, and media were also down less than 1%.
Sector of the Day
Nifty Realty Index
Real estate stocks in particular collapsed back and may retest earlier bottoms. Godrej Properties, DLF, Phoenix Mills, Oberoi, and Lodha were among the biggest losers in that space.
Tweets Of the Day
In the tweet of the day section, there was a funny take on the circular market cap game. Oracle invested $100 billion in Nvidia, Nvidia wants to invest $100 billion in OpenAI, and OpenAI wants to invest $100 billion in Oracle. This makes everyone’s market cap look bigger even though no real money is moving out. It creates an infinite loop, which the market may ignore for now, but at some point, it will likely get discounted.
