Can We Expect Some Relief Soon?

Market Update - Monday, 9 Mar

The market faced a rude surprise Today’s Morning, when crude oil began trading 23% higher than Friday’s close. By the end of the Indian session, a significant part of that initial jump had dissipated, with prices retracing from $119 down to nearly $102.

While the trouble is not yet over, there are signs that the situation is becoming stressful for the US and many other global economies. There is a reasonable hope that this week will bring some kind of resolution, and all eyes are on the US President’s press conference tonight, where a roadmap for withdrawal might be announced.

While the market currently looks headed down, it is important to note that out of the five sessions since this war situation began, four days actually started on a positive note. The market is not simply giving up; it is trying to build back up.

Today, the market closed near its high of 24,000, recovering from an open and low near 23,700. The bulls deserve some credit despite being badly bruised. Both the Nifty Junior and Mid-cap indices are showing hammer-like or bottoming candles.

• Across the board, Mid-caps were down 2%, Small-caps fell 2.33%, and Bank Nifty dropped the most at 3%, though it also formed a pin candle that could potentially signal a bottom.

• Interestingly, gold is also struggling, down 0.8%, while silver lost 0.26%. This suggests a liquidity crisis where even entities like the Polish government are selling gold to raise cash.

Other Market Triggers

• The advance-decline ratio was quite flat today, with only 60 advances compared to 439 declines.

• A few stocks like Reliance, Infosys, Wipro, Bharti, and Sun Pharma escaped the fury.

• Reliance actually gained ground as refining margins are expected to improve.

• Conversely, banking, autos, infrastructure, and steel were hit hard.

• In the Nifty Next 50, Adani Group, Power, Torrent Pharma, Divi's Lab, D-Mart, Hyundai, and ICICI GI managed to avoid the downward trend.

• In other market movements, the India VIX rose 17% to near the 23 mark.

• Emcure Pharmaceuticals moved up 7.44% following the appointment of a new director.

U.S. Market Updates

• This followed a red session in the US where indices fell 1% to 2.2%, with stocks like BlackRock, Intel, FedEx, and Caterpillar seeing significant drops.

What to watch next ?

• A notable perspective shared by Dr. Jihoon Park suggests a potential sequence for how this conflict might end. The theory suggests oil may stay above $100 briefly, leading to a collapse in political support for the war in the US, followed by a withdrawal of forces.

• This scenario envisions a more radical regime taking power in Iran with enriched uranium going underground, while oil stays elevated due to the time needed to restart pipelines and terminals.

• The real cost of such a futile war would be a $3 trillion loss in market cap and a global recession.

• While these scenarios are being built, it is vital not to let them overcrowd your decision-making.

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What To Read This Week ?

The Red Metal: Why Copper is the Ultimate Economic Pulse

While gold often steals the spotlight due to its unique monetary status and "safe haven" appeal, copper tells a much more grounded story. Unlike gold, copper is an industrial workhorse. It is a pure commodity that lives and breathes within the world’s factories, construction sites, and power grids. Because its demand is so closely tied to production, its price movements offer a transparent window into the future of the global economy.

The Historical "Doctor Copper" Diagnosis

Looking back over nearly 200 years of data, a clear pattern emerges: when the economy slows down, copper prices stumble. Conversely, when copper hits new highs, it’s a signal that the economic engine is firing on all cylinders.

Historically, we saw a massive slump during the Great Depression (post-1929), followed by a vertical climb as the US re-industrialized. In more recent memory, the dot-com bubble of 2000 caused a noticeable dip. However, once China joined the WTO and began its massive infrastructure boom, copper prices skyrocketed, interrupted only briefly by the 2008 financial crisis.

New Frontiers: EVs and Solar Energy

Today, we are seeing a continuous rally that began in the post-COVID era. While general industry remains a steady consumer, we have entered a new phase driven by the "Green Transition."

• Electric Vehicles (EVs): Use significantly more copper than internal combustion engines.

• Solar & Wind: Renewable energy infrastructure is copper-intensive.

As long as copper maintains its upward trajectory, the outlook for global growth remains optimistic. It isn't just a metal; it’s a map of where we are headed.

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