Where is the market headed?
Friday, 31st October — the end of the week and the end of the month. Surprisingly, it hasn’t been a bad month at all. Even though the last couple of sessions were in the red, October still managed to close over 5% higher. That’s quite rare, and when we look at the month as a whole, it has turned out to be decent. FIIs have also pumped in nearly 2 billion dollars this month after a long time, which is another positive sign. So, despite the recent dullness, October wasn’t bad overall.
There was an important update from SEBI today. Bank Nifty is going through a restructuring. Until now, it had 12 constituents, but now the number will go up to 14. The maximum weight for each stock, which was earlier 33%, will now be capped at 20%. This means heavyweights like HDFC Bank, ICICI Bank, and SBI will no longer dominate the index beyond that limit. Their combined weight will come down from 62% to 45%.
Because of this change, many funds — including Bank Nifty funds, arbitrage funds, and others tracking the index — will have to reduce exposure to these three and add some new ones, possibly Yes Bank, Indian Bank, Union Bank, and Bank of India.
These adjustments will happen gradually in four stages until March 2026, with the first phase starting in December 2025. This move should help reduce the volatility that Bank Nifty often faces due to its concentrated structure.
Market Overview
Markets, however, have been nervous lately. After the recent fall, they seem to be looking for support. Whether the current level will hold or we go back to previous highs or averages, we’ll know next week. A few days ago, it seemed like the India-US deal was close, but that narrative quickly faded. The Fed’s statement that there will likely be no rate cuts in December also disappointed investors.
For the day, Nifty was down 0.6%.
Nifty Next 50
Nifty Junior fell 0.37%, Midcaps slipped 0.49%, Smallcaps dropped 0.56%.
Nifty Mid and Small Cap
Bank Nifty
Bank Nifty declined 0.44%. It wasn’t a big fall, just a dull session overall.
GOLD
Gold remained flat, down 0.21%, while silver gained slightly by 0.17%. Both metals have corrected a bit and now depend on the market’s mood to see if they can challenge previous highs again.
SILVER
Advance Decline Ratio
In the market breadth, advances fell through the day while declines kept rising, leading to losses in several major stocks like Cipla, Hindalco, Adani Group stocks, Kotak Bank, HDFC Bank, and ICICI Bank. Bharti Airtel, Bharat Electronics, and Eicher Motors stood out positively in the Nifty.
Heat Maps
In the Nifty Next 50, United Spirits, PSU banks like PNB, Canara Bank, and Bank of Baroda did well. Lodha and Adani Ensol also gained, while DLF fell after its results. The earlier optimism around lower interest rates also faded, leading to weakness in Varun Beverages, Pidilite, and Vedanta.
Mover Of The Day
The star performer of the day was Naveen Fluorine International, which surged 14.28% with heavy volumes. The reason behind the move isn’t clear yet, but it made a strong new high.
Sectoral Overview
On the sectoral side, Tourism, Media, and Metals were the biggest losers, each down more than 1%. PSU banks continued their strong rally, up 1.56% and hitting new highs.
The buzz around higher FDI limits, possible mergers, divestments, and new inclusions in Bank Nifty are all supporting the PSU bank rally. Defense stocks also did well after a long time, rising 1%.
Sector of the Day
Nifty PSU Banks Index
Nifty India Tourism Index
U.S. Market
In the U.S. markets, it was a rough day as well — the S&P 500 dropped 1%, Nasdaq was down over 1.5%, Meta fell 11%, Altria lost 8%, Oracle and Boeing each dropped around 6%, and CVS Health was down 5%.
Tweets Of the Day
The gold monthly chart showed that the rally which began in the second half of 2022 is still strong, now entering its third year. Even with some corrections, gold continues to show strength, and unless the monthly low breaks, the trend remains upward. Though it’s overextended and away from moving averages, that’s how markets behave sometimes. A deeper correction would be a good opportunity to add more.
