Today’s Market Summarised

Markets continue to see profit booking, with mid-cap and small-cap selling continuing.

Nifty opened the day at 16,402 with a big gap down and tried to move up. The level of 16,510 was taken as resistance more than once in the day but could not be broken. With some last-minute selling, Nifty ended the day at 16,450, down 118 points or 0.71%.

Bank Nifty opened at 35,200 with a 250 points gap-down. The index was more weak than Nifty, and could not move up above 36,100 in the afternoon. The index kept playing around the 35k mark and Bank Nifty closed the day at 35,033, down 520 points or 1.46%.

All sectoral indices except Nifty FMCG closed in deep reds. Nifty Metal, Nifty Realty, Nifty PSU Bank and Nifty Auto were the worst-performing sectors.

Asian markets closed mixed in the day. All the European markets are currently trading slightly in the red.

News Picks

FMCG stocks performed well in the day with Hindustan Unilever(+5.3%), Britannia(+4.7%), Nestle India(+3.4%) and Tata Consumer(+0.7%) closing in the top-gainers list of Nifty 50. 

Metal stocks in Nifty and even around the world crashed as prices of Iron Ore Futures fell. Nifty’s top-losers were mostly from the sector with Tata Steel(-8.3%), JSW Steel(7.1%) and Hindalco(-5.4%) in the red.

All Nifty Metal stocks closed in the red with NMDC(-9.5%), Vedanta(-9%), Jindal Steel(-7.6%) and SAIL(-7.3%) closing in the most red.

UPL(-4.4%) fell sharply and is down more than 12% in the last month.

MindTree(+4.6%) continued its rally while most other IT stocks closed in the red. Interestingly, Nifty IT was down only 0.3% showing that there was strength in the market.

CarTrade IPO opened 1% below its issue price, and fell further. The stock closed at 1501, down 7.2%.

Tata Motors(-3.4%) moved down after Land Rover recalled more than 1 lakh Range Rover Sports and LR4S over fire risk. Ashok Leyland(-4.9%) also moved down while Maruti stayed flat.

Auto ancillary stocks including BharatForge(-6.2%), MotherSumi(-5.1%) and Bosch(-2.1%) came under profit-booking after research firm IHS Markit predicted a sharp fall in cars output worldwide.

Ujjivan Small Finance Bank(-18%) fell to deep red after the company’ MD & CEO Nithin Chugh resigned. Parent company Ujjivan(-12.2%) also saw huge selling.

Markets Ahead

We had noted on Tuesday that the market is being cautious after hitting fresh all-time highs. We noted that the FMCG and IT stocks were outperforming, with smart money pouring into these defensive sectors.

Once again to repeat, Defensive stocks are shares of those companies that have continual demand for their products despite market conditions.  Usually, there is a demand in these stocks when markets turn cautious or investors feel they are overvalued.

We saw this trend continue on Wednesday and today as well. There is a shifting of money from stocks that have already rallied to FMCG and IT. We even saw Hindustan Unilever touching Rs 6 lakh crore market cap in the day.

FMCG stocks are a must-have in your long-term portfolio and will give you good returns in the longer term. We also saw other “safe stocks” like HDFC Bank(up 2% from day-open) and Bajaj Finance(up 2.% from day open) moving up despite a bearish market.

Smallcaps and midcaps also saw profit booking which saw the index being pulled down.

Sometimes these slow and safe bets are the way to go. Especially when markets are cooling down like they are now!

How did the 4-day week go for you? Is your current holdings mostly filled with largecap or midcap stocks? Let us know in the comments of the marketfeed app.

Catch you all at The Stock Market Show sharp at 6:30 PM!