Where is the market headed?
Once again, the market is bouncing off the morning lows, showing a very clear trend over the last two sessions that the market is not willing to stay low. In fact, new buying is coming through on every dip. This represents a significant change in the markets that has been observed over the last two days.
There seems to be significant optimism in the markets now compared to last week. Last week, any negative news caused the markets to go down throughout the day. Now, despite poor news from overseas, the markets are still gapping down but recovering and actually moving into the green during the last two sessions. This is a clear shift in how the market is operating.
The market is certainly expecting a bounce or a V-turn from here, and the bears suddenly seem to be giving up at this point. Understanding this nuance of the market move versus the narrative is very important for acting accordingly going forward.
Gap down openings are being met with buying on dips, which is a very good sign for a potential bottoming out of the markets. In the last eight sessions, the market has not really gone anywhere. If the market was at 23,000 eight sessions ago, it is still at or near 23,000 now, just bobbing around a couple of hundred points here and there. Net-net, no more value is being lost in the last eight sessions, especially despite the escalation on the war front.
Market Overview
It is now widely expected that there will be some de-escalation this week. There are timing ultimatums given by Trump and a lot of rumored negotiations through Pakistan. We will see where this goes, but the market certainly suggests that an interim bottom has been reached. Nifty is up 1.1%.
Nifty Next 50
Nifty Next 50 closed comfortably above its three-day high at 1.45%.
Nifty Mid and Small Cap
Mid-caps are up 1.44%, near a two-day high, while mid-small caps are up 1.07%, sitting above a four-day range.
Bank Nifty
Although the short term is turning negative, the Nifty Bank is also up 2.06% and above its three-day range. All of this points toward a good week ahead unless something dramatic happens on the war front.
GOLD
Gold is up 0.42% at a price of 14883, showing some thawing, while silver remains absolutely flat.
SILVER
Advance Decline Ratio
The advanced decline trends throughout the day show advances moving up to 388 against 111 declines, which is a very good sign.
Heat Maps
The Nifty heat map is completely green barring energy stocks like Reliance and ONGC, along with some stagnation in Eicher and JSW. Most other stocks in the Nifty are in the green. The Next Nifty heat map also shows more stocks in the green, including Muthoot, Bank of Baroda, Ambuja Cement, and DMart. Consumer stocks like DMart and V-Mart have been running very hard in the last two or three sessions, though Divi’s Lab, Hyundai, and VBL were a bit soft today.
Movers Of The Day
In the mover of the day segment, V-Mart is extending gains for a third straight session with a 31% rise. As mentioned, these consumer stocks are doing extremely well, reflecting new optimism in the market. Zydus Wellness is also up 15%, gaining 17% in just two or three sessions.
Sectoral Overview
Looking at sectoral trends, except for Nifty Oil and Gas—which was led by Reliance and fell 1.3%—and Nifty Media, which was down 0.22%, all other sectors moved up. Nifty Capital Market and Nifty Financial Services gained 2.78% and 2.3% respectively.
Many sectors, including PSU banks, real estate, tourism, and private banks, moved up more than 2% today, cementing confidence that the market is trying to come back.
Sector of the Day
Nifty Capital Market Index
Capital market stocks like Indian Energy Exchange, MCX, BSE, Aditya Birla AMC are all doing extremely well, gaining 3% to 5%.
Nifty Oil & Gas Index
Conversely, Chennai Petro, Reliance, ONGC, Oil India, and Gujarat State Petronet lost ground in the oil and gas space.
U.S. Market
In the previous session of the US markets, Intel Corporation went up 4.8% and AMD rose 3.4%. Netflix, Accenture, and IBM also moved up. While the S&P 500, Dow Jones, and Nasdaq remained very quiet, the Russell 2000, which represents small caps and the larger breadth of the US market, moved up almost 0.7%, which is good news. The Nasdaq 100 heat map showed gains for Netflix, Costco, Walmart, AMD, and Intel, while losses were seen in Tesla, Meta, Google, and ASML.
Tweet Of The Day
The tweet of the day segment features a comparison between large-cap and mid-and-small-cap stocks. The white line represents the Nifty 100 index, and the blue line represents the mid-cap and small-cap 400 index. Surprisingly, since the market started to correct in September of 2024—and we are already 18 months through this process—both the large-cap and the mid-and-small-cap indices have performed exactly the same. Most people would have expected small and mid-caps to do much worse than large-cap names.
