Where is the market headed?
There has been no respite — the market is on its fifth day down and people are feeling tense. Tariff worries and visa issues are weighing on sentiment. There are no positive statements coming from anywhere and the US–India treaty is still pending. With little optimism left, this is exactly when a steady, systematic way of investing can matter.
Market Overview
Today turned into a sixth day down for Nifty and we have now slid almost 500 plus points from recent highs. The market looks short-term oversold. Whether we find support here or not is anybody’s guess, but 24,300 to 24,400 — which was the earlier support — is the logical place to watch. We may also find some support around the 24,800 mark. It is a big letdown for the bulls.
Nifty lost about 0.66% for the day.
Nifty Next 50
Nifty Junior had a third sharp down day at around 0.75% down.
Nifty Mid and Small Cap
Mid caps were down 0.66% and Small Caps were also down 0.66%.
Bank Nifty
Bank Nifty slipped about 0.26%. The recent enthusiasm of previous weeks has been sort of nullified and the market will need fresh cues to get excited again.
GOLD
Gold is holding up reasonably well, showing around 11,354 on the chart per gram, so it has not fallen much despite a good run in the last month.
Advance Decline Ratio
The advance–decline picture is quite sad: the entire day saw advances falling and declines rising. There were only 107 advances against 393 declines, which explains why the heat map is all red.
Heat Maps
A few Defense Stocks moved up, but mostly it was broad selling across Banking, Finance, Power and Autos. Tata Motors got hit badly.
In the Nifty Next 50 some names showed recovery like Adani Power, and Vedanta is up on the commodity rally in Copper and Silver. But Lodha, Swiggy, Pidilite, Torrent Pharma, Zydus Life, United Spirits and others were down. It felt like across-the-board selling today.
Mover Of The Day
The mover of the day was Hindustan Copper, which rose about 6% again. That is the fifth straight day of gains for the stock as copper and silver prices go up.
Tata Investment Corporation corrected today on profit booking after two strong days and was down roughly 5.5%. Tata Motors is also causing some market-cap loss because of Jaguar losses this financial year, which is weighing on sentiment.
Sectoral Overview
Sector trends were broadly negative. Almost every sector was down except for defence, which saw some good deals — HAL in particular had what looks like an almost $800–900 million deal. Metals were slightly up, about 0.22%, on the commodity run, but most other sectors were lower.
The big losers were IT and realty, with realty down about 1.65% for the day. The real estate index has quickly come down to recent lows and, if it breaks below, it could open the door to newer lows.
Sector of the Day
Nifty Realty Index
Godrej Properties, DLF, Phoenix, Oberoi and Lodha were down 2–4% and are near their recent lows.
Nifty IT Index
In IT, names like TCS, Coforge, Persistent, Oracle and HCL Tech were down between about 1% and 2.5%.
Tweets Of the Day
A couple of tweets sum up the mood and the math worth thinking about. First, with the Bihar election near, the government plans to deposit ₹10,000 each into 75 lakh women’s accounts. It is a big social step for many people, but there is a question of planning and funding. It feels like competitive vote-garnering funded by taxpayers. We are all, as taxpayers, becoming venture capitalists funding ventures we have no direct stake in. This kind of fiscal pressure will not help budgets or the currency.
If US money supply is rising fast and we are also creating money rapidly, the rupee keeps getting weaker against the dollar even when the dollar is falling versus other currencies. That is a double whammy. Imports of non-USD products and services are getting more expensive, and India is losing ground against the US dollar.
The other tweet is a striking piece of math. Morgan Stanley has proposed a 60:20:20 global portfolio for private clients — 60% equity, 20% debt, 20% gold. Today private wealth allocations to gold are typically only 2–3%. Morgan Stanley manages about $6 trillion in assets. If a large part of their client base moves to 60:20:20, Morgan Stanley clients alone could require roughly $1 trillion of gold buying. Private wealth globally is about $350 trillion, so even a small shift of 2% into gold could mean huge flows into the yellow metal. If that happens over the next few years, gold prices could be pushed much higher. This is a warning for people who hold no gold — it may be worth studying the numbers for yourself.
