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Market Update - Wednesday, 14 Jan

There is currently no respite in the markets as they continue to slip, with some sectors falling significantly harder than others. Today saw a renewed downward movement in the large-cap space, while the mid and small-cap segments were largely spared.

Big names like HDFC Bank and, more recently, ITC have been facing significant pressure, and the changing patterns suggest these major counters are being demolished. With heavy selling on these large-cap stocks, the market currently has very little to hang on to.

Although the budget is only two weeks away, there is no narrative of positivity being built around it yet. The primary overpowering narrative remains the American tariff deal, with no thawing of negotiations in sight. Instead, new tariff issues seem to surface daily, creating a bleak outlook.

However, there are seasons in the market where such phases must be endured. On a brighter note, the precious metals universe, along with metals and commodities, is performing extremely well.

• The Nifty fell 0.26%, while the Nifty Junior gained 0.39%. Mid-caps rose 0.21%, and small-caps performed slightly better at 0.48%, moving off a recent double bottom.

• While short-term trends for small-caps have turned positive, the mid and long-term outlook remains negative.

• The Nifty Bank closed flat, maintaining a positive mid and long-term trend.

• Gold and silver remain extremely buoyant, with gold up 1% at 14250 per gram and silver jumping 4.3% to touch $91.

• While the official silver price is 278000, market prices are higher due to GST and premiums.

Other Market Triggers

• Significant cuts were seen in TCS, Maruti, Hindustan Lever, and Asian Paints.

• Major banks like HDFC, ICICI, and Kotak all lost approximately 1.3%.

• Conversely, Axis Bank, ONGC, and Tata Power saw some gains. In the Nifty Next 50, PSU banks, commodities, and metals showed strength, while stocks like Naukri and TVS Motors faced downward pressure.

• MMTC was the mover of the day, rising 12.6% amid rising gold and silver prices, though it remains a highly volatile stock.

US Market Updates

• In the US, the Dow Jones saw a steep 0.8% cut, with stocks like Salesforce, Adobe, and Visa falling significantly.

• Visa has been impacted by news of a potential 10% cap on interest charges, while big tech names like Meta and Microsoft also saw losses.

• In contrast, Intel and AMD recorded strong gains.

• These market movements are monitored closely as part of various investing strategies, though they do not constitute formal recommendations.

What to watch next ?

• World Gold Council estimates suggest that Indian households hold approximately 30,000 tons of gold.

• Based on a methodology that estimates holdings between 25,000 and 35,000 tons, a mean of 30,000 tons at current prices—nearing 1.5 lakh rupees per 10 grams—translates to 450 lakh crore of wealth.

• This figure represents only private household wealth and excludes holdings by temples, the RBI, or other institutions. In USD terms, this is approximately $5 trillion.

• To put this in context, the entire Indian stock market—including promoter, government, and institutional holdings—is also valued at roughly $5 trillion.

• While households hold about $1 trillion in stocks, they hold $5 trillion in gold, showcasing a massive contrast in wealth distribution.

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What To Read This Week ?

📈 The Great Sensex Shuffle: A 40-Year Lesson in Survival

The Evolution of India’s Benchmark

Have you ever wondered how the face of corporate India has changed over the last four decades? If we look at a Venn diagram comparing the Sensex of 1986 to the Sensex of 2025, the result is startling. Out of the 30 companies that defined the market in 1986, only six remain in the index today. The rest have either shut down, shrunk, or were simply pushed out by faster-growing competitors.

The "Survival of the Fittest" Mechanism

The most important thing to understand is that the Sensex is not a static list; it is a momentum portfolio. It functions as a self-cleaning mechanism.

• The In-Crowd: It keeps the stocks that are outperforming and growing.

• The Out-Crowd: It ruthlessly removes underperformers to maintain the health of the index.

1986: The Era of Old Industrials

Back in 1986, the index was dominated by heavy industries, fertilizers, and traditional engineering. You might remember names like:

• Automobiles & Engineering: Hindustan Motors, Premier Engineering, Mukand, Bharat Forge.

• Industrial & Others: Ballarpur Industries, GSFC, Peico (Philips), Great Eastern Shipping, Indian Hotels, and Tata Power. Many of these names, which were once household giants, have since faded into the background or exited the elite list entirely.

2025: The New Titans of Tech and Finance

Fast forward to today, and the landscape is unrecognizable. The index has pivoted toward technology, private banking, and services. New heavyweights have taken the throne:

• Tech & Services: Infosys, Tech Mahindra, Indigo.

• Banking Giants: Axis Bank, Kotak Mahindra, SBI. These companies represent the current "momentum" of the Indian economy—areas where growth and capital are currently concentrated.

The Elite "Intersection" (The Common Six)

Only six legendary companies have managed to stay relevant and maintain their position in the Sensex from 1986 all the way to 2025:

The Survivors : Reliance Industries, Tata Steel, Larsen & Toubro (L&T), ITC, Mahindra & Mahindra (M&M), Hindustan Unilever (HUL)

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