How are the Markets Looking ?
It was a challenging day for intraday players, particularly in the Nifty market. After discovering that Foreign Institutional Investors (FII) and domestic institutions did not sell, the confidence of market participants grew. They believed that the previous day’s fall was a mere facade and that there was no selling in the market. As a result, the market opened with a significant gap up, with the Nifty surging almost 150 points in the first hour.
However, this initial optimism was short-lived as the market collapsed later in the day, nearly filling the morning gap. Ultimately, there was little achieved during the day, and the market ended near its previous close. This consolidation phase, which we have been experiencing for a while now, seems to persist. Hopefully, the current support levels will hold, but if not, we may find support at lower levels.
Nifty Heatmap
Looking at the Nifty heat map, we can observe that IT stocks, particularly those related to Nasdaq, maintained a strong lead throughout the day. Other stocks also saw some gains but eventually gave back most of them. State Bank, HDFC Bank, ICICI Bank, Coal India, Tata Motors, L&T, Adani Ports, and Adani Enterprise performed relatively well. On the other hand, FMCG stocks remained muted.
Sectoral Overview
The real estate sector has been on a remarkable upward trajectory, witnessing significant gains over the past weeks and months. In the last twelve months alone, real estate prices have surged by a staggering 63%. In just one week, the sector gained 11%, and over the course of one month, the increase reached 17%. This rally in real estate can be attributed to developers successfully selling properties even before their official launches, indicating strong demand. Major players like DLF, Soba Lodha, and others have reported impressive sales figures, contributing to the sector’s growth. While some may argue that the market is becoming overheated, the duration of such irrational valuations remains uncertain.
Mid & Small Cap Performance
When examining mid-cap and small-cap indices, we find that they have managed to consolidate within the range of the previous day’s candle. Given the substantial surge in these indices over the past few months, this consolidation indicates relative strength.
Nifty Bank Overview
On the other hand, the Nifty Bank has seen significant damage, not only covering the morning gap but falling further below it. Now, the support level at 40,690 becomes crucial, as the performance of the Nifty Bank has a notable impact on overall market sentiment.
Highlights – Nifty REALTY
The real estate market continues its impressive ascent, defying any notions of being overbought. When a trend is in motion, it is important not to prematurely abandon it, as there is little certainty regarding the extent and duration of such trends.
Highlights – Unverified news leading to price drops
Additionally, the market has been plagued by unverified news and rumours. For instance, there was a rumour surrounding Polycab India, suggesting an income tax notice for tax evasion amounting to 200 crores. As a result, the stock plummeted almost 10%, causing a loss of approximately 7,000 crores in market capitalization. Such rumours, spread without confirmation from the company or proper verifications, highlight the need for regulations regarding the dissemination of news.
Another case involved the merger of Zee where significant media outlets prematurely reported that the merger had been called off. However, both companies involved in the merger later clarified that the news was untrue. This kind of misleading information creates panic among investors, leading to significant losses for those affected. It is evident that actions must be taken to ensure accountability and responsible reporting within the media.
Overall, this week has been characterised by sideways movement, as small caps and mid caps experienced some minor gains, while the overall market remained stagnant. The upcoming Thursday holds the promise of new direction with the release of earnings results from TCS and Infosys. Investors eagerly anticipate this information to gain clarity on potential market movements.
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