Ceasefire & Surges: The Market Recovery Report

Market Update - Wednesday, 8 Apr

After five weeks since the war began, a ceasefire has been announced. Reports from last night indicate that Iran has presented ten points for negotiation, and the US has stated they will stop for two weeks. In our view, this signifies the end of the war, particularly regarding US involvement. While Israel and Iran will likely continue to face regional issues, it appears the US was searching for an off-ramp to exit the conflict, and they have found it.

Global markets are already rejoicing, starting with Japan this morning. While some might say it isn't over until it is truly over, the market reaction is telling. We have seen a gain of almost 10% from the bottom in just three sessions, making up more than half of the losses incurred since the war started.

• The Nifty leaped up by 3.78% today with a huge gap up. We may continue to climb or consolidate before another move up, which will be revealed in the coming days.

• Broad market performance was strong across the board.

• Nifty Junior rose 4.74%, representing a nice jump of almost 10% from its bottom.

• Mid-caps were up 3.97%, and small-caps rose 3.9%, with short and mid-term trends turning positive for the latter.

• The Nifty Bank saw a big leap of 5.67% despite the RBI not cutting rates. While a rate cut was a hope for the market and could have provided more aggressive confidence, there are likely valid reasons for holding off, including persistent inflation fears and the fact that the war hasn't officially ended.

• Gold gave up some of its morning gains to trade 1.5% from the previous session, while oil prices plummeted.

• We noted the start of this fall yesterday afternoon, and today saw a massive 9% gap down for crude oil.

Other Market Triggers

• Market trends showed a flat advanced decline line, meaning stocks opened and held their levels throughout the day with almost no change.

• There were 463 advances and 236 declines. Virtually everything was green except for stocks that previously benefited from high oil prices.

• Major movers included L&T jumping 7.5%, Maruti up 6%, HDFC Bank up 5.7%, and Reliance up 3.3%. Axis and Kotak Bank also saw gains.

• Notably, the stocks that were down the most jumped the highest today. This is a normalization phase, and these stocks won't necessarily lead the rally indefinitely.

• Today was a knee-jerk reaction where institutional players bought Nifty and Nifty Next stocks heavily to regain positions.

• Other significant performers included DLF up 7%, Union Bank and Muthoot both up 8%, Chola up 9%, and TVS Motors up 6%.

• While stocks like Torrent Pharma and Dmart took a break, tourism stocks performed well.

• Metals and commodities also continued their strength, suggesting they will be a sector that moves forward strongly.

• The mover of the day was EaseMyTrip, which surged 17.4% following an MoU with Delhi PWD to improve urban infrastructure. While the stock moved from 6 to 8 rupees, it is a small jump considering it previously fell from 50 or 60 rupees.

• Adani Green rose 11.2% after a US district court granted a request for a pre-motion conference.

U.S. Market Updates

• While the previous US session was mixed—as it occurred before the ceasefire announcement—today is expected to be buoyant.

• UnitedHealth was up 9%, CVS 6.7%, and tech giants like Broadcom, Intel, and Alphabet did well.

• The Dow Jones was down 0.2% while the Russell 2000 was up 0.15%.

What to watch next ?

• It is remarkable to note that while it took five weeks to come down, the market has recovered 50% of that ground in just three sessions.

• For those who were sitting on the sidelines thinking they would wait to get back in, there was no chance to enter early today as the market opened higher and stayed there.

• The key question for market timers is whether to enter now or wait for a dip to fill the gap. However, another gap tomorrow could leave those investors completely out of turn. This is why we never try to time the market. It is essential to stay invested in stocks that are churning for strength.

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What To Read This Week ?

Market Reality Check: Where Your Wealth Actually Grows

If you’ve ever felt like the market is "doing nothing" or constantly dropping, this data will show you that you aren't alone—it’s actually the nature of the beast. We’ve analyzed the time spent in Bull Markets, Bear Markets (defined as a 20% drop from All-Time Highs), and Consolidation Phases across the globe.

The Global Scorecard: A Tale of Three Phases

When we look at the last two decades, the distribution of market cycles varies wildly by geography. For instance, the Hang Seng (Hong Kong) has spent a staggering 69% of the last 20 years in a Bear Market, with only about 9.7% of the time in a true Bull Run.

On the other end of the spectrum, the UK market is the "King of Consolidation," spending 71% of its time moving sideways.

India vs. The World: The Resilience of Nifty

The data for Nifty tells a unique story. We spend roughly:

• 34% of the time in a Bear Market

• 48% of the time in Consolidation

• 18% of the time in a Bull Run

Interestingly, Japan and Brazil follow a somewhat similar pattern, while the US (S&P 500) enjoys more frequent Bull Runs and extended periods of consolidation.

Performance in Dollars: The Real Winners

To make this a fair fight, we normalized all returns into US Dollars. When you look at the 20-year absolute growth, the results are eye-opening:

Despite India spending a significant 34% of its time in a downtrend, it emerged as the top performer alongside the US. This proves that quality markets recover faster and jump higher during those short-lived Bull Runs.

Managing Your 10-Year Expectations

If you are planning to invest for the next decade, you must align your psychology with these historical realities. Based on the "India Model," a 10-year investment journey looks like this:

• 3.5 Years: Watching your portfolio in the red or recovering from a crash (Bear Market).

• 4.5 to 5 Years: Watching prices move sideways with no significant gains (Consolidation).

• 2 Years: The "Golden Window" where the majority of your wealth is actually created (Bull Run).

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