Where is the market headed?
The new week started on a positive note with some interesting global and local developments. Over the weekend, President Trump and Prime Minister Modi exchanged a few tweets, which seemed far softer than the earlier tone between the two leaders.
While it is too early to say whether this will lead to an improvement in ties, at least some pleasantries are being shared. Markets also seem to be reading into this as a sign that perhaps the worst is behind us and that both nations may work towards repairing their strained relationship.
On the global front, the bigger story continues to be the fear surrounding the US dollar. Many countries, including India, are reducing their US treasury holdings and replacing them with gold. India alone has sold nearly $20–25 billion worth of treasuries and moved into gold.
With several central banks following the same path, gold prices have shot up sharply. In less than three weeks, gold in rupee terms has climbed from ₹9,800 to over ₹10,800 per gram, a gain of more than 10%.
Market Overview
Back home, Nifty has been consolidating. For the past three days, it has remained almost flat after the GST-related volatility last week. Today, it opened slightly positive and closed with a gain of 0.13%. Panic that was visible last week seems to have cooled down, though the market still faces downward pressure.
Nifty Next 50
Nifty Junior rose 0.41%.
Nifty Mid and Small Cap
Mid-caps gained 0.38%, and Small caps moved up 0.18%.
Bank Nifty
Bank Nifty, however, continues to hover near multi-month lows, as selling remains concentrated in this sector.
GOLD
Gold in rupee terms has climbed from ₹9,800 to over ₹10,800 per gram, a gain of more than 10%. Gold ETFs worldwide, including the largest US-based GLD, are at record highs. While this looks frothy, any disruption in gold deliveries could push prices much higher, possibly into a parabolic move.
Advance Decline Ratio
Heat Maps
Mover Of The Day
Among individual movers, Adani Power surged 3.96% after signing a pact with Druk Green for a 570 MW project in Bhutan.
Sectoral Overview
Sectorally, the day was mostly flat, except for autos, which continue to shine. The Nifty Auto index jumped 3.3% today and is up nearly 16% over the past month. Stocks like Bharat Forge, Ashok Leyland, Motherson, and Tata Motors have led this rally. This shows how important it is for investors to rotate into sectors that are performing strongly, rather than staying stuck in laggards. On the flip side, IT remained weak on fears of fresh US tariffs, falling another 1% today.
Sector of the Day
Nifty Auto Index
Tweets Of the Day
Globally, there are signs of stress in the US economy. Markets are now expecting three rate cuts by December and further easing next year. Historically, rate cut cycles in the US have always coincided with the onset of recessions, raising concerns that a downturn could be near.
Adding to the surprise, Tether, a major stablecoin company, announced that it would start allocating part of its reserves to gold and even gold miners. This is ironic given that the crypto space was once seen as an alternative to gold.
