Where is the market headed?
It was another day where the markets continued their upward momentum. This now seems to be a confirmed uptrend where every few days or weeks we are witnessing a new high. The index itself is not far from its all-time high.
Market Overview
The market opened with a gap up around 25,160, which was about 150 points higher than the previous close. It closed 0.4% higher, and importantly, the gap created at the open remained unfilled, a classic sign of strength. When gaps are not filled quickly, especially to the upside, they indicate strong bullish sentiment.
Nifty Next 50
The Nifty Next 50 performed even better, posting a gain of 1.25%. It also opened with a gap up at 68,350 and built upon that momentum throughout the day to reach 68,840.
Nifty Mid and Small Cap
Midcaps saw similar action, gaining 1.01% for the day. Small caps led the rally with a strong 1.33% up move.
Bank Nifty
Nifty Bank was up 0.46%, giving up some intraday gains but staying above the recent congestion zone, hinting at further upside.
GOLD
Gold was mostly flat, up just 0.12%, hovering around ₹9,700 per gram. It’s consolidating around its long-term moving average since mid-April and seems poised for a potential breakout towards ₹10,200 once momentum picks up.
Advance Decline Ratio
The advance-decline ratio was completely flat for the day. Although the market started strong, it quickly leveled out and moved in a tight, sideways range for the rest of the session — almost a straight line. At the end of the day, it stood at 377 advances to 121 declines, indicating the market stayed elevated without retracing the gap up.
Heat Maps
The Nifty heat map showed green across the board, especially in financial services, NBFCs, and banks. Notable gainers included Power Grid, Adani Enterprises, Sun Pharma, L&T, and a few IT names. Global cues also contributed positively — U.S. markets doing well lifted Indian IT stocks.
Among the Nifty Next 50, ICICI Bank was the only major laggard. On the other hand, Chola Finance, REC, PFC, Canara Bank, and PNB all saw gains, likely in reaction to the RBI rate cut. Energy and Capital Goods stocks also performed well. Other notable gainers were Britannia, Vedanta, Hyundai, Indigo, and IOC. DMART and Swiggy saw losses, with Swiggy down 2.63%.
Sectoral Overview
Sectorally, capital markets led the gains once again. This segment continues to remain in the spotlight. PSU banks were up 1.5% today, 1.2% over the last week, and a stunning 25% over the past month. Public sector enterprise stocks were up 1.2% today, followed by energy and tourism. Real estate and defense took a breather with slight declines.
Sector of the Day
Nifty Capital Market Index
In the capital markets space, MCX surged 7%, followed by UTI AMC, Aditya Birla AMC, and Indian Energy Exchange. A new all-time high was seen in the capital market index, as it effortlessly broke past recent highs.
Story of the Day: The Reality Check – Bhav Bhagwan Che
Now let’s dive into the topic of the day — the Bhav Bhagwan Che (BBC) principle & examine some real-world examples where price moved before any news hit the market.
Non-discretionary systems help override these biases. Let’s take an example of a sector that didn’t move for 13 long years. One such sector, shown in yellow in our charts, did absolutely nothing from 2011 until very recently.
Consider the HDFC Bank–HDFC Ltd. merger in April 2022. The announcement came on April 4, but the stock started moving up three to four days prior, rising from ₹1,450 to ₹1,510 — a 2.5% move.
When the merger was officially announced, the stock gapped up 13% in a single day. For some, it was a surprise. But others seemed to have anticipated it.
A similar case was the Reliance Jio–Facebook deal in April 2020. There was a 9% rally before the deal was formally announced on April 22. Once announced, the stock saw another massive gap up.
More recently, Infosys’s Q4 FY23 results disappointed the street. Yet the stock had already been declining throughout March and fell sharply a few days before the results — again hinting that someone knew what was coming.
When the results were announced, the stock gapped down immediately, leaving no opportunity to short post-announcement.
That’s exactly what Bhav Bhagwan Che suggests: the price already reflects known and unknown information. It discounts the news well before it’s released to the public.
Take the Adani Group stocks — two trading sessions before a crucial Supreme Court verdict, the stocks surged sharply. On the verdict day, they gapped up again but eventually saw volatile moves and gave up most gains.
Another example is Vedanta’s demerger news in September 2023. The stock surged 7–8% just a day before the official announcement. L&T’s buyback and special dividend in July 2023 saw the stock rise 6% in the few sessions leading up to the announcement.
Despite rules against insider trading, leaks happen all the time — board meetings, vendor interactions, document preparations, or employees — someone always knows something. Information asymmetry is real, and it’s global.
Let’s look at international examples. Pfizer’s COVID-19 vaccine results in November 2020 led to a price spike days before the news was announced.
A huge gap up followed, but within five days, the entire move was reversed. “Buy on rumor, sell on news” played out perfectly.
The Kraft Heinz–Unilever merger in February 2017 saw a 13% spike even before the official announcement.
Similarly, in 2018, Elon Musk’s “funding secured” tweet about Tesla triggered heavy volumes and a 21% move before the news went public, followed by an 11% spike on the day of the tweet.
Back to HDFC Bank — after the merger announcement and initial rally, most gains were surrendered over the following week.
The same happened with Adani Enterprises after the verdict — price surged before and fell after.
What does all this mean for investors? It means we must ignore whisper numbers and media hype — but also recognize that there’s no smoke without fire. When stocks move sharply without any visible news, it’s often because news is on its way. The market sniffs it out before we do.
So never dismiss a price move. If a stock is rising with no explanation, it likely means something significant is brewing. More demand than supply leads to higher prices. And we usually find out “why” much later. By then, it’s often too late.
Quarterly and annual results are backward-looking. Management guidance is often biased. Why would a management admit to future problems? Relying on their narratives — without price confirmation — can be dangerous.
Price, on the other hand, is the ultimate truth-teller. It reflects the collective wisdom, expectations, and actions of all participants. While small caps can be manipulated, large caps generally can’t — and price trends can be trusted more than corporate speeches or press releases.
So the BBC principle — Bhav Bhagwan Che — tells us that price is God. It is the collective truth. And even if we can’t predict the future, following trends keeps us one step ahead.
Let us know in the comments if you’ve ever fallen for a narrative and bought a stock on exciting news — only to find out it was the top. We’ve all been there. Learn from those experiences. Examine what the price was doing before the news broke.
Thank you so much for reading this blog. If you found value in it, do LIKE and SHARE it.
WeekendInvesting launches – The Momentum Podcast
Join us on The MOMENTUM PODCAST as we sit down with Venkatesh, a dynamic product manager and MBA graduate from Hyderabad. Discover his incredible journey from starting investing during the 2020 COVID crash to achieving a remarkable 5X salary jump!
In this insightful conversation, Venkatesh shares:
✅ His early investing blunders and crucial lessons learned.
✅ How he built a disciplined investing routine with Nifty index funds and direct stocks like Tata Elxsi.
✅ The surprising benefits of his IT domain knowledge in stock picking.
✅ His long-term vision for financial independence and strategic wealth building.
✅ Why he prioritizes investments and EMIs (including his home loan!) before anything else.
If you’re a young professional looking to kickstart your investment journey or seeking inspiration for disciplined wealth creation, this episode is a must-watch!
