Is the Market Discounting the end of the War ?

Market Update - Monday, 20 Apr

We are currently at the 50-day mark in terms of the war. With the two-week ceasefire set to expire in the next 48 hours, it is very interesting to note that Iran is claiming they will not renegotiate anything, while Donald Trump is stating that a deal will be done.

Deciding whose word to believe remains the question, and the answer will likely be revealed by Wednesday. The market, however, is showing signs of resilience.

Regarding the charts, the daily chart on the Nifty is looking reasonably decent. It has been two sessions since the market bottomed on the 1st of April, and it has not given up ground for two sessions in a row, which signals underlying strength.

• The Nifty Junior has run up from 60,000 levels to almost 70,800 levels. Although it was flat today, all trends have turned positive.

• Mid-caps are also doing alright, remaining absolutely flat today while staying very near their February highs, with all trends positive there as well.

• Small-caps are gradually moving up, showing a minor 0.36% dip today, but they have more than recovered the losses from the entire month of March.

• The Nifty Bank index is also flat at 0.03%, suggesting the entire market was essentially frozen awaiting new information expected in the next 48 hours.

• Gold is flattish at minus 0.37%. Crude oil jumped up by 2.73%, which is not a significant move, especially considering the fear surrounding the breakdown of negotiations.

Other Market Triggers

• The State Bank of India and JSW Steel were pulling the Nifty up, along with ICICI Bank.

• On the Nifty Next 50 heat map, there were several stocks with smaller losses. Adani stocks, energy stocks, and capital goods stocks continue to run, with CG Power, ABB, and Enri all performing well.

• Vedanta lost some ground, down 2.1%, while Dmart, HAL, and BBL saw small profit booking bouts, but there was no major fall anywhere on the Nifty Next 50.

• In the mover of the day segment, Sterling and Wilson Solar made a big move after a long time, jumping 9% for the day after winning a Coal India project.

• On the other hand, IEX dropped very hard by 8%. Many investors have been accumulating IEX, but the stock has shown virtually no strength or momentum for the last many quarters, and today provided another rude shock.

U.S. Market Updates

• In the previous session of the US markets, Emerson Electric, GE, General Motors, Booking Holdings, Lowe's, and Home Depot all performed well.

• All market indices were up between 1% and almost 2%, as the US market is pulling up very strongly. This may be pricing in the end of US involvement in the war. Wednesday night will serve as a reality check for the US markets to see if the US is indeed out of this war.

• The NASDAQ 100 heat map is looking quite well, with Tesla, Meta, Google, Apple, Nvidia, AVGO, and Walmart all contributing to that gain.

What to watch next ?

• Regarding the National Stock Exchange (NSE) unlisted stock, there is an interesting debate about why it is not flying. Despite positive news regarding the NSE IPO and the fact that the BSE is flying at new highs, the NSE still trades in the unlisted space at 25% to 30% below its high.

• Some argue it is a great buy due to lower valuation compared to the BSE, but both are quoting at high valuations, with the BSE at roughly 60 times earnings. Regulators are also looking at curbing derivative volumes and restricting retail participation in the FNO segment, which is a major part of exchange earnings.

• Other theories for the price lag include the six-month lock-in for pre-IPO buyers, meaning investors are looking at the next 15 months with no exit.

• It remains a mystery why a stock with an upcoming IPO and a cheaper valuation than its market equivalent is not rising.

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What To Read This Week ?

Silver: The Dual-Role Powerhouse – Industrial Essential or Monetary Hedge?

Today, we’re unpacking a fascinating perspective on silver, drawing insights from recent infographics by Visual Capitalist, which track the metal’s performance over the last century.

Silver is a unique asset class, operating simultaneously as a monetary store of value and a critical industrial metal. Understanding this duality is key to navigating its future trajectory.

The Historical Context: Cycles of Boom and Correction

If we look at the last 100 years, silver’s journey has been defined by extreme cycles. Following the massive price spike in 1971, the market endured a prolonged period of stagnation. However, when viewed over the long term, silver has consistently proven to be an effective hedge against inflation.

Key historical pivots—including the Great Depression, the intense speculation of the 1980s, and the post-2008 monetary easing—show that silver tends to aggressively reprice during periods of financial uncertainty and liquidity expansion.

The New Demand Drivers: Beyond Investment

While the "monetary" argument for silver persists—driven largely by investor behavior and the historic gold-to-silver ratio—the modern narrative is shifting toward structural industrial demand. We are seeing a massive surge in consumption from:

• Solar Energy: The green energy transition is the biggest story in the silver market, with solar panel manufacturing demanding unprecedented amounts of the metal.

• EV Revolution: Electric vehicle batteries and sophisticated electrical systems require significant silver content.

• Electronics & Semiconductors: As global technology infrastructure expands, silver remains indispensable in modern electronics.

The Gold-Silver Lag: Patience is a Virtue

Currently, while silver may experience a consolidation phase after its recent price volatility, the outlook remains constructive. History teaches us that silver often acts as a high-beta play on gold. When gold initiates a major breakout, silver frequently follows—often with a "lag effect"—as the market forces the gold-to-silver ratio to normalize. If you are watching gold, keep a close eye on silver; it is rarely left behind for long.

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