Where is the market headed?
The month ended on a volatile note. It began flat but turned turbulent after Trump’s statement last evening, threatening India with 25% tariffs and penalties over its ties with Russia. Markets opened lower in response, but soon recovered on expectations that he might reverse course, as he often does. Expiry-related movements added to the noise before the market slipped again. Overall, a choppy session to wrap up a tumultuous month.
Market Overview
Nifty closed down 0.35%, which was a better outcome than expected. The index opened near the day’s low and held that level, often a positive signal suggesting a potential bottom, as seen in previous sessions. While it’s too early to confirm a trend reversal, today’s close offers some optimism in an otherwise developing story.
Nifty Next 50
Nifty Junior down half a percent.
Nifty Mid and Small Cap
Midcaps fell 0.83% and Smallcaps slipped 0.91%, indicating more pronounced weakness in the broader market.
Bank Nifty
Bank Nifty staged a smart recovery, closing just 0.34% lower after being down nearly a percent earlier in the day.
GOLD
Gold rose 0.92% and is hovering near its breakout level, signalling potential strength ahead.
Advance Decline Ratio
The advance-decline trend weakened significantly by the end of the day. Until 2 PM, advances were rising and declines were falling, but a sharp reversal, possibly due to expiry pressures shifted momentum. The session ended on a weak note with an advance-decline ratio of 127 to 374.
Heat Maps
The Nifty heat map was mostly red, with a few exceptions. Jio Finance turned green on news of fresh fund-raising, while Hindustan Unilever (HUL) rose 3.5% post-results. Despite sales increasing by 4% and profit by 7%, the overall long-term stock movement has been muted. Key drags on the index included Adani Enterprises, Sun Pharma, Reliance, and State Bank of India.
In the Nifty Next 50 space, names like Indigo, Hyundai, United Spirits, and Godrej Consumer posted gains, mostly driven by earnings. On the downside were Ambuja Cement, Zydus, PNB, and LIC, which saw notable declines.
Movers Of The Day
HUL helped balance the market and arguably saved the day for the Nifty.
On the flip side, IOC fell 2.29%, along with several other oil refiners. The drop was driven by concerns over a potential disruption in the supply of Russian oil, either due to constraints or strategic choices.
Sectoral Overview
Sectoral trends were weak across the board. Only FMCG managed gains, up 1.4%, supported by HUL’s results and a slight defensive push in a few other FMCG names. The rest of the market saw broad-based damage—Oil & Gas, Capital Markets, Pharma, Metals, and Commodities all fell between 1% and 1.48%. Overall, it was a significantly negative day.
Sector of the Day
Nifty FMCG Index
Another sector that has struggled to perform is FMCG, which is also back to where it was around early May. The index has been largely moving sideways for an extended period. Stocks like Emami, Godrej, Hindustan Unilever, United Spirits, and Dabur showed some upward movement.
Nifty Oil & Gas Index
Several stocks in the Oil & Gas space were beaten down today, pulling the sector back to levels last seen in May.
Story of the Day: From Discounts to Discipline: A Smarter Way to Invest
In India, the culture of bargaining and finding a good deal is deeply ingrained. From vegetable markets to shopping malls, and from real estate to e-commerce, the idea that paying less is being smart is almost second nature. This mindset, shaped by our everyday experiences, inevitably finds its way into the stock market as well.
Investors often hesitate to buy stocks that have already risen significantly, believing it’s too late or that the stock is overpriced. This discomfort stems from a mental anchor — a price once seen in the past becomes a benchmark, and anything above it feels unjustified. But markets don’t follow personal biases. They move based on demand, momentum, and broader market forces.
There are countless examples of stocks that looked expensive at one point but kept rising. DMart’s IPO seemed overpriced at ₹500, but it went on to cross ₹5,000 in a few years.
Cochin Shipyard, a PSU stock, broke past previous highs in 2023 after a long period of stagnation and delivered 20x returns thereafter. These aren’t anomalies — they’re reminders that price movement often signals strength, not risk.
The fear of missing out and the belief that success must come from buying cheap prevent many from participating in these rallies. Instead of entering when a stock is clearly showing strength, investors wait for it to ‘correct’, often missing the entire move. Even those who buy may exit too early, spooked by modest gains or a minor correction.
This behavior is rooted in a few strong biases. First, there’s the belief that only cheap stocks can be good investments. Second, many hate the feeling of being late and miss opportunities waiting for the ‘right’ time. Third, waiting gives a false sense of control, the belief that we can dictate our entry price. Lastly, there’s a flawed association of high price with high risk, when often the opposite is true.
Stocks at all-time highs face no overhead resistance. Everyone holding them is already in profit, which reduces selling pressure. Historically, many such stocks continue trending higher simply because the path is clear. Anchoring bias, loss aversion, and narrative discomfort cloud rational judgment and lead to missed opportunities.
Momentum investing counters this mindset. It doesn’t worry about whether a stock seems expensive or cheap — it focuses only on strength. If a stock is performing well, it enters. If it weakens, it exits. It’s simple, rules-based, and devoid of emotion. Momentum strategies don’t look for discounts; they look for performance.
Examples like Tata Elxsi show how powerful this can be. (see the image below)
The stock didn’t make a new high for 16 years, but when it did, it delivered a 6x return in just nine months, followed by another 6x after a brief plateau. Entering mid-way into a trend and exiting with discipline can still lead to significant gains, without needing to catch exact tops or bottoms.
In investing, the goal is not to feel smart for buying low — it’s to make money by being in what’s working. Every investing style, including value investing, ultimately relies on momentum to deliver returns. Breaking free from the anti-momentum mindset means trusting trends, trusting systems, and embracing what works not just what feels comfortable.
