Where is the market headed?
The global markets recently experienced some downward pressure, and gold also came off its highs following the news of a new US attack on Iran. A chart of gold in the background highlights this sell-off. Tavi Costa very nicely articulates that there are two specific things the US cannot afford right now: interest rate hikes and a prolonged, costly war. Because the US cannot afford these two outcomes, they will inevitably have to backtrack at some point.
Market Overview
These geopolitical tensions are probably just negotiation moves, and the market kind of recognized that. The market sprang back up during the session to cover most of the losses that happened in the previous session, especially in the broader market. This indicates that the market is not willing to go down any further. Despite facing such significant headwinds, the market is sitting pretty much at 24,000, which serves as a very good sign.
Before diving into the exact details of the day’s trade, please ensure you read the disclaimer fully. Looking at the indices, Nifty made a good attempt to come back and recover what was lost yesterday, closing with a modest gain of 0.34%.
Broader Market Indices
The broader market, however, was much more buoyant. Small caps were up almost 1.5%, mid caps gained 1.4%, and Nifty Next 50 rose by 0.8%. Bank Nifty also performed well, marking a 0.9% increase. Nifty was ultimately the only major index that did not manage to gain much ground during the session.
Heat Maps
The heat map for the day was reasonably positive. Financials and select large caps did well, including HDFC Bank, Kotak Bank, SBI Life, Bajaj Finserv, Shriram Finance, Bharti Airtel, Sun Pharma, and UltraTech Cement. On the flip side, some losses were recorded in Dr. Reddy’s, ONGC, Maruti, Infosys, and Hindalco.
Moving over to the Nifty Next 50 space, there was a fantastic move in DLF, which shot up by more than 4%. Tata Capital rose almost 3%, while HDFC AMC and Canara Bank also registered gains. Lodha Developers climbed almost 7%. This clear strength shows that real estate is doing very, very well. In contrast, some losses were observed in Mazagon Dock, Solar Industries, and United Spirits.
Top Gainers & Losers
Sectoral Overview
In terms of sectoral trends, the real estate index saw very nice gains of almost 3.5%. Looking back over a one-month period, real estate has gained an impressive 13.55%, making it the second top gainer just behind Nifty Pharma over the last month. Other notable gaining sectors for the day included capital markets at 2.3%, media, PSU banks, and India Tourism. This marked a solid comeback day for many sectors, though a few areas continue to sulk. Predominant among the laggards was Nifty IT, which dipped 0.3%, followed by Central CPSEs down 0.4%, and autos down 0.2%.
Sector of the Day
Nifty Realty Index
The real estate index was powered heavily by Brigade Enterprises, Lodha Developers, Anant Raj, and Aditya Birla Real Estate. The sector has come back to its previous recent high very quickly, which underscores the inherent strength and relative strength of real estate versus other sectors.
U.S. Market Update
Shifting focus to the US markets, the previous session was a mixed bag where the market segments were all over the place, showing highly diversified outlooks. The S&P 500 was down almost a quarter percent, and the Dow Jones fell remarkably by 1%.
Meanwhile, the Nasdaq managed to push up by a quarter percent, while the Russell 2000 dropped 0.9%. Looking closer at the Nasdaq 100, the top gainers included Nebius Group, Corporate 4Weave, SanDisk, Baker Hughes, and Broadcom. Conversely, Exxon Enterprise, Honeywell, Palo Alto Networks, Vertex Pharmaceuticals, and Booking Holdings lost ground. Some of these performing stocks could potentially be part of the US stock strategy at Weekend Investing, though these are strictly observations and not recommendations.
The Nasdaq 100 heat map also showed good gains in AVGO (Broadcom), NVIDIA, Cisco, and several other stocks across the semiconductor and AI space. However, SpaceX continues to go down, and Tesla, Microsoft, Meta, Google, Amazon, Palantir, and Netflix all lost reasonable ground.
Tweet Of The Day
The tweet of the day segment focused on a complete shocker that has come through for a recently concluded Oberoi Realty project. The project had successfully brought in more than 8,000 crores of bookings. However, a suitor by the name of AIPL has filed a petition in the Punjab and Haryana High Court regarding the land Oberoi acquired. AIPL states that they hold a previous memorandum of understanding for taking over this land, arguing that Oberoi’s project does not have full legality. As a result of this legal dispute, the entire development process has basically been completely stopped.
Consequently, the people who have put up their hard-earned money are going to have to wait a lot more time to come to know what actually happens with their investment. Furthermore, the active demolition happening at the site will now stop.
This situation goes to show that there will always remain a baseline of uncertainty when it comes to housing, especially under-construction housing. There are so many moving parts in a real estate project that you really cannot say for sure that nothing will go wrong.
People who speculate in the under-construction market are taking on the inherent risk that a project could get delayed for any number of unforeseen reasons. In this specific case, who knows how long this legal battle may drag on in court.
Therefore, if you are an end-user and you are not looking for pure speculation, it is always wiser to go for finished products. Let a project be completely finished first. Even though you may end up paying a little more than where the property was valued at launch, you gain the full finality of an occupation certificate and a possession certificate. The title is clear, and you secure a very clean deal when you buy something ready.
This serves as a major lesson for all under-construction property investors regarding the risks involved. Unfortunately for the buyers in this project, that risk has come around just three days after the launch. It is difficult to say whether this is just a small, temporary stay or if it will evolve into a much deeper, prolonged issue for the project.
A lot of hope was riding on Oberoi Realty entering into the NCR space, and if this project goes into cold storage for a few months or quarters, people may not view the NCR market the same way going forward. This is big news for the real estate sector and will likely act as a shot in the arm for DLF, who is probably going to make full use of this situation.
