Where is the market headed?
Today, the GST Council released a long 90-plus page note. In this, nearly 90% of items were rationalized into just two GST rates. This step is being seen as a positive move by the government to push growth. Only luxury and sin goods faced higher tax, and most people are not complaining about that.
The surprise was in the market reaction. The day started strong with all indices opening higher. But within hours, the market slipped back and gave up all gains. Many traders were confused because good news was expected to push the market higher. However, in reality, markets often discount the news earlier.
Market Overview
Despite the intraday fall, the Nifty is still range-bound. It will only break out strongly above 25,250 levels. On the downside, there are several support zones, which means there is no deep worry either.
Nifty Next 50
Nifty Junior, midcaps, and small caps fell more than the main index, showing some weakness.
Nifty Mid and Small Cap
Bank Nifty
Interestingly, Bank Nifty managed to hold steady.
GOLD
One standout story is gold. From the third week of August to early September, gold has jumped from around ₹9,800 to ₹10,600, an 8% rise in just two weeks. Gold is known for such sharp moves. Historically, it rises in bursts, then consolidates for months. If momentum continues, gold could even test ₹3,700 to ₹4,200 levels in the coming phases.
Advance Decline Ratio
Breadth in the market was weak. Out of the Nifty 500, there were only 143 advances against 354 declines.
Heat Maps
On the Nifty heatmap, Mahindra and Mahindra stood out with a six percent gain. Reliance, Maruti, IT stocks, Kotak Bank, Jio Finance, NTPC, Power Grid, and BEL were among the major losers. Tata Steel gave up some ground after a strong previous session, while ITC and Nestle managed to sustain. FMCG stocks overall were strong, with names like Dabur and Britannia benefiting from GST changes.
In the Nifty Next 50, ICICIGI was among the gainers, while VBL, Swiggy, Hyundai, IRFC, Bank of Baroda, and Godrej Consumer were notable losers. Auto stocks continued their rally with brokerages upgrading targets and higher volumes driving fresh buying.
Mover Of The Day
Mahindra & Mahindra was the star performer with a 6% gain
Bajaj Finance and Bajaj Finserv also gained on the back of GST removal on insurance.
Sectoral Overview
Sector-wise, defense stocks were hit hard with a 1.72% fall. CPSEs were down 1.27%, PSU banks were down 1.1%, and several other sectors also slipped between -1% and 0%. On the other hand, FMCG, consumption, and financial services managed to gain.
Sector of the Day
Nifty India Defence Index
The defense index, in particular, showed no attempt to retest previous highs and remained locked in a downward range. Stocks like Garden Reach, Data Patterns, Cochin Shipyard, BEML, and Astra Microwave dragged the sector lower.
Nifty CPSE Index
Tweets Of the Day
New AI tools are emerging in the field of financial analysis. These tools can study company activity and market behavior in detail. Over time, they may even make some traditional roles in fundamental and technical analysis less relevant. This will have long-term effects on the industry, and it is something worth watching closely.
Globally, a silent but important trend is also unfolding. India has reduced its US treasury holdings by $15 billion and added 39 tons of gold to reserves. Many central banks are doing the same, slowly moving away from US treasuries and building gold reserves.
