Nikhil Agarwal

Despite a drag from banks and other financial stocks on Sensex and Nifty due to a capital gains tax hike in the Budget, smallcaps and midcaps continued rallying unaffected by the Finance Bill changes. Sensex plummeted around 500 points, led by HDFC Bank, ICICI Bank, Axis Bank, and Bajaj twins with losses up to 3%. In contrast, the Nifty Smallcap250 index surged 1.4%, and the midcap index also rose around 1%. Microcaps saw even higher gains, rallying over 2%. While the increased tax rates for equities are a long-term negative, the hike's magnitude remains marginal.

Markets regulator Sebi has validated a well-known secret on Dalal Street - most retail intraday traders don't make money. According to a study by Sebi, 71% of individual traders in intraday equity segment incurred losses during FY23, up from 65% in FY19 and 69% in FY22.

According to Nagaraj Shetti of HDFC Securities, the Nifty has breached the 10-day EMA support level and is now hovering near the 20-day EMA support level of approximately 24,270. These moving averages have held strong for the past 5-6 weeks, and the market's failure to remain above these levels could trigger a significant downturn.

Addressing the question on the hotel industry, we find that it has been reaching new highs in terms of occupancy rates. Previously, 65 percent was considered standard for the hotel industry. However, for the first time, we are seeing 70 percent occupancy rates in hotels, marking a new record after a very long time. This bodes very well for tourism.

Tata Motors shares surged nearly 4% on Thursday, reaching a new 52-week high of Rs 1,067 on BSE. This followed Nomura's upgrade of the Nifty stock to buy, setting a target price of Rs 1,294. Nomura cited Tata Motors' shift from premium to luxury vehicles as key to maintaining competitiveness in challenging segments.

Investors' faith fueled Dalal Street's high valuation multiples, but Nomura cautioned on potential headwinds if domestic equity flows drop due to tax hikes. Nomura's 2024 Nifty target sees little upside. Key stock picks include SBI, ICICI Bank, and others. Sectors like housing, cement, and solar energy may benefit from budgetary changes.

Nifty ended Thursday expiry on a flat note but formed a bullish counterattack-type pattern on the daily chart despite a weak global trade setup. The index is currently holding immediate and key support at its 20-daily EMA, and maintaining this level will help attract bullish strength, according to chartists.

FIIs sold stakes in nine Adani stocks, capitalizing on a price rebound during the June quarter, while LIC increased its investments in Adani Energy and Adani Enterprises. Mutual funds and retail investors demonstrated varied preferences across Adani stocks. Adani Ports emerged as a top performer in 2023 after recovering Hindenburg-era losses, showcasing strong financial health and reduced debt levels.

In the Union Budget announced on July 23, Finance Minister Sitharaman raised both short-term and long-term capital gains tax rates, to 20% and 12.5%, respectively. Prior to this, analyst Wood had cautioned that a substantial increase in capital gains tax could trigger a market downturn exceeding the correction seen after the June 4th Lok Sabha elections.

According to Nagaraj Shetti of HDFC Securities, the Nifty index has recently regained support from its 10-day and 20-day exponential moving averages (EMAs) after briefly dipping below them. This reinforces the significance of these moving averages as a support level for the index over the past several weeks.