Where is the market headed?
Oil has remained reasonably stable, hovering near $100 for the past many days. It attempted to move upward, only to be smashed down. However, today, despite talks of Iran suggesting the opening of the Strait of Hormuz, ceasefire discussions, and the 1 May deadline for Trump to seek congressional support, oil is still trending upward.
This development is surprising because, on the surface, ceasefire attempts appear to be progressing on many fronts, with Iran having met with Russia to pursue a united ceasefire front. Something is brewing underneath that is causing oil to rise again, potentially linked to US sanctions on Chinese refineries or a market perception that Russia and China are being gradually drawn into the war, coupled with uncertainty regarding potential rash decisions by Trump. Consequently, the situation is currently worsening rather than improving, serving as a piece of bad news to start the Daily Bite for April 28th.
Market Overview
We are nearly two months into this war, which initially appeared to be a one-day or two-day affair that would quickly conclude. Instead, there is no sign of closure. Although the markets did not fall significantly today, dropping only 0.4%, there is no undercurrent carrying the market upward, despite decent results beginning to pour in from several companies. The fact that the market remains at 24,000 despite global events may indicate relative strength, keeping it not more than 10% down from the top. While a 10% decline from the peak is not typically a major concern for indices, a significant portion of the larger market cap within the NSE universe is much, much lower, which is the real issue for most portfolios.
Nifty Next 50
The Nifty Junior index is down 0.33%, while mid-caps are up 1.1%, defying the day’s downward move. Since the start of April, mid-caps have experienced a continuous run, with only one day of sell-off that was covered very quickly.
Nifty Mid and Small Cap
Small-caps remained flat at 0.05%, which is perhaps the better part of the market news, as the broader market is no longer falling in line with Nifty.
Bank Nifty
Bank Nifty, however, acts as the weaker link, having erased 1.54% today. A downward trend appears to be taking place there, with all short, mid, and long-term momentum trends currently negative on Nifty Bank.
GOLD
Gold has also turned downward, falling by 1.16%. While it appeared to be stabilizing near the $4,800 mark, it is still falling and has not completed its consolidation. It may retest the bottom or form a higher bottom, but the process is not yet finished; the next wave will likely start after a breakout from a trend line, perhaps a few months from now.
Crude Oil
Meanwhile, crude oil is rising, reaching 104.29 on Brent crude, placing it one day away from an all-time high close. This is causing some alarm in the markets.
Advance Decline Ratio
The advance-decline trend was a mixed bag today. The market started with better advances, but declines eventually took over, resulting in 291 declines to 208 advances.
Heat Maps
The heatmap was equally mixed, with financials, IT, most FMCG, and even autos in the red. The only sector moving up was energy, specifically Reliance, ONGC, and Coal India, alongside some stocks in pharma, such as Dr. Reddy’s.
Adani stocks have performed exceptionally well over the last few months, with gains averaging around 40% for many of them, catapulting Gautam Adani to what is believed to be the position of the richest person in Asia. The rest of the Nifty Next Nifty space remained either flat or down, leaving little place to hide for most stocks.
Movers Of The Day
Among the movers of the day, Tata Chem moved very sharply by 11%, potentially due to expectations of a surprise announcement in their Q4 results. Conversely, Rossari Biotech dropped 7% amidst rumors of a stake sale.
Sectoral Overview
Sectoral trends were mixed; Nifty PSU banks, the Nifty banking index, and Nifty private banks all led the market down, whereas oil and gas, central PSEs, energy stocks, and capital markets pulled the market up. Over the last month, almost all sectors have performed well except for IT. Pharma has been weak, but there has been phenomenal performance in capital markets, defense, and real estate. The oil and gas chart, in particular, is very different from major indices that have started to drop, as it is trying to catch up with the previous top, with Chennai Petro, ONGC, Oil India, Adani Total, and Reliance all moving up sharply. PSU banks led the market down by 2%, with Union, Canara, Bank of Maharashtra, Bank of India, and Bank of Baroda all moving down by 2% to 3% for the day.
Sector of the Day
Nifty Oil & Gas Index
Nifty PSU Bank Index
U.S. Market
In the previous session of US markets, profit booking was seen in AMD, which fell 3%. This follows a 16% to 17% run-up in the previous session. T-Mobile, Charter Communications, McDonald’s Corporation, and Texas Instrument all lost some ground, while the Dow Jones and S&P 500 remained flat. These stocks could be part of the Weekend Investing US stock strategy, but they are certainly not recommendations.
Nvidia’s market cap has reached $5 trillion again, a scale that is hard to believe. As a single company, it is now bigger than the entire Indian market cap. Most of this growth has occurred in just the last four or five years, and it will likely become a Harvard case study on how a stock went from nothingness to all-time greatness, boasting the highest market cap ever for any stock. Other stocks that did not do well included AMD, ASML, ARM, AVGO, Apple, Amazon, and Walmart, while only Google, Meta, Nvidia, MU, and Intel moved up slightly.
Tweet Of The Day
The “Tweet of the Day” segment highlights data from Bar Chart showing that the Chinese real estate market has fallen to its lowest price in at least the last 20 years. This serves as an example of how markets can change. After 15 years of growth, everything has been given up in three years, which can happen to any market.
In India, there is a feeling that real estate never declines, but similar scenarios could occur in the future due to a lack of growth. China has continued to grow, but its real estate sector grew too rapidly for 20 years, leading to a situation where supply overwhelmed demand, leaving fewer buyers than sellers. India does not have that problem yet, but it serves as a reminder never to assume a market must go up or will never come down. Even gold, which has never fallen in Indian rupees, could potentially face external influences, so it is necessary to follow trends and trending sectors.
