How are the Markets Looking ?
Welcome to the Weekend Investing Daily Byte on January 30th, where we take a closer look at the current state of the market. The market seems to be exhibiting signs of fatigue, as it leapt up yesterday and reached the same resistance zone it has encountered multiple times before. The level of 21,800 has become a significant warzone for the Nifty, with each attempt to break through resulting in failure. Although it is expected that the Nifty will eventually break through, the duration of the consolidation period remains uncertain.
Throughout this analysis, it is crucial to pay attention to the 24th of January low, as it holds great significance for the market. If the market comes down and breaks this level, we can anticipate deeper downsides. However, as long as this level holds, or even the 21,000 mark, there is no need to worry. The market is merely passing time at these levels.
Nifty Heatmap
Today’s Nifty heat map reveals a sea of red, with many stocks experiencing declines. ITC is down 2.5%, Reliance down 2.8%, Bajaj plummeted by 5% on Bajaj Finance, Titan dropped by 3%, and NTPC and Ultra Semco are down 3% as well. LNT is down 2%. These declines suggest that foreign institutional investor (FII) selling might be influencing the market.
Even HDFC Bank, one of the heavyweights in the market, is down 0.7%. Coal India, ONGC, LtIM, and Sun Pharma also experienced declines. There are few places to hide in the current market, except for BPCL and Tata Motors, which were slightly in the green. However, PSU banks managed to gain 1% for the day, real estate gained 0.4%, and metals had a modest uptick of 0.3%. On the other hand, energy stocks, infra stocks, FMCG commodities, consumption stocks, pharma stocks, and public sector enterprises (PSEs) have all taken a beating, experiencing declines ranging from 0.5% to 1.7%.
Sectoral Overview
Reviewing the past week, we observe a mixed performance across various sectors. Some sectors performed well, while others struggled. In the last month, bank Nifty has been the underperformer, particularly due to the decline in private banks. FMCG has also lost ground, largely due to Hindustan Unilevers’ results. On the other hand, mid-cap stocks have been holding up relatively well and are showing promising signs of bouncing back.
Mid-Small & Small Cap Performance
Mid caps haven’t broken into a new high yet, but they have witnessed a significant bounce from the current support level at 17,000. This support level is crucial for the market moving forward. The small caps also made another new high at 14,850 plus, but gave back most of their gains by the end of the day, closing a small gap. Despite this, both mid caps and small caps continue to perform well, leaving no room for immediate concern. Only if the small caps drop below 14,000 will worries start to arise.
Nifty Bank Overview
Regarding the Nifty bank, it has been struggling to make any headway. Despite filling a gap three days ago, it is currently consolidating without showing great potential.
Highlights
The chart for private banks is not looking inviting at the moment, and it is essential for them to start gaining momentum for the overall bank Nifty chart to improve. On the other hand, the PSU banking index is looking promising. It made another new high today at 6,200 before giving up some gains. This performance indicates that PSUs have been leading the banking industry, while private banks have been driving it down.
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