How are the Markets Looking ?
The day started on a positive note, with the market reaching a high of 21,750 plus. However, as the day progressed, we saw a steady decline, resulting in the closing of the morning gap and previous session gaps. This reversal indicates a potential double support level at 24,500, which the bulls hope will hold to initiate a recovery. Otherwise, a further decline may be expected.
Nifty Heatmap
The market heatmap reveals the extent of selling pressure in various sectors. State Bank of India, leading the PSU banks, experienced a decline of 2.3%. Despite favourable numbers, HDFC Bank continued its downward trend at -1.1%. Other prominent names such as ICICI Bank , Nestle, Levers, ITC, Britannia, Reliance, and Mahindra also witnessed substantial declines, ranging from 1% to 1.5%. Furthermore, TCS, Infosys, Asian Paints, Adani Enterprise, LTIM, Coal India, and many more faced significant cuts.
Sectoral Overview
Looking at specific sectors, real estate managed to eke out a small gain, showcasing its strength and resilience amidst the market turbulence. PSU banks, on the other hand, led the downward movement, as they often do during market corrections. FMCG, metals, IT stocks, and pharma also experienced declines, indicating a widespread selling sentiment across the market.
Mid & Small Cap Performance
Even though mid-cap stocks experienced a slight decline in the last two sessions, no significant gains were lost. They had reached 47,600 and we closed at 46,920, we wouldn’t be worried even if it went to 46,000. Small-cap stocks, in contrast, went sideways, demonstrated relative stability and held their ground against the selling pressure faced by the large-cap stocks.
Bank Nifty Overview
Nifty Bank is the weak link as it broke the support level formed on 3rd January. Tomorrow will be crucial whether we take the support and play long form here or see a downtrend move.
Highlights – Nifty REALTY
Interestingly, real estate stocks have defied market expectations and have been performing exceptionally well. In particular, DLF reported substantial sales of 7200 crores for its new project, causing market disbelief and it reached 760. Similarly, Soba and Macro Tech Developers (Loda) rallied in the last few sessions, showcasing their strength and creating a positive sentiment within the sector.
An overall assessment of the real estate market indicates its strong performance, which is a positive indicator for the mid-to-long-term health of the economy. Although some of these stocks may seem overbought at the moment, the underlying factors of demand, liquidity, and reduced inventories suggest that this sector’s rally may sustain for a more extended period.
Highlights – FMCG
FMCG moved down, however, if we look at the larger picture, we can see that FMCG had quite the rally from November 2023 going from 50,800 to near 58,000, so some correction is expected.
What is upcoming?
As we move forward, it’s crucial to keep an eye on the US markets, which currently face a crucial double top. The outcome of this event will likely have an impact on the Indian markets as well. Furthermore, Thursday will be a vital day for the market, as TCS and Infosys are scheduled to report their results. The market’s reaction to these reports may set a trend for future movements.
If you have any questions, please write to support@weekendinvesting.com
