SEBI Registered Research Analyst •
Reg. No. INH000026381
Registration granted by SEBI, enlistment with BSE and certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.
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Strong Negative — Smallcaps led the decline, highlighting elevated risk aversion and aggressive selling in the broader market.
India VIX+20.21%
Elevated Caution — The sharp rise in volatility signals increased uncertainty and heightened expectations of market swings.
FII vs DII : The Weekly Battle
This Week's Flow | ₹ Crore
FII ACTIVITY
-₹2,697.37 Cr
FIIs Sold ₹2,697.37 Cr
DII ACTIVITY
+₹10,942.19 Cr
DIIs Bought ₹10,942.19 Cr
Market Insight: FIIs continued to sell, while DIIs stepped in with substantial net purchases. Domestic buying comfortably outweighed foreign selling, providing an important cushion against further weakness. However, the sharp declines across midcaps and smallcaps indicate that institutional support alone has not been enough to stabilise broader market sentiment.
The Big Picture
Indian equities witnessed a broad-based correction, with smallcaps and midcaps bearing the brunt of selling pressure. The sharp rise in India VIX points to increased uncertainty and the potential for larger market swings. Although DIIs remained strong net buyers, continued FII selling and weakness across market segments warrant caution. Traders should prioritise risk management, avoid aggressive bottom-fishing and look for signs of stabilisation before assuming a sustained recovery.
Market data as provided | For educational purposes only
Sector Spotlight
The Week That Moved Markets
1. Welspun Corp Secured a US natural-gas pipeline contract worth approximately ₹5,500 crore through its subsidiary, taking its global order book to a record level and strengthening its international energy-infrastructure business.
2. Larsen & Toubro (L&T) Won two major construction contracts covering Central Secretariat buildings in New Delhi and office towers in Amaravati, reinforcing its order pipeline in the infrastructure and construction sectors.
3. Kalpataru Projects International Received orders worth approximately ₹2,349 crore across power transmission and building businesses, adding to its execution pipeline for FY27.
5. Transrail Lighting Won orders worth ₹927 crore in power transmission and conductor supply, supporting continued demand for electricity transmission infrastructure.
6. Infosys Reported a 6% year-on-year rise in Q2 net profit to around ₹7,823 crore, while lowering its FY27 revenue-growth guidance to 1–2% in constant-currency terms, reflecting a more cautious business outlook.
7. Adani Power Reported a sharp rise in Q2 profit, with consolidated net profit increasing to around ₹7,022 crore from ₹2,906 crore a year earlier. Higher revenue and operating profitability drove the strong year-on-year improvement.
8. JSW Steel Reported Q2 consolidated net profit of approximately ₹5,067 crore, compared with ₹1,734 crore a year earlier, alongside higher revenue and operating profit.
9. Bajaj Finance Posted a 28% year-on-year rise in Q2 profit, supported by growth in revenue and its lending business, keeping attention on consumer-credit demand and asset quality.
10. UltraTech Cement Reported year-on-year growth in Q2 revenue and profit, reflecting activity in the cement market and keeping focus on infrastructure demand, volumes and cost pressures.
11. Indian Hotels Company Reported a 19.4% year-on-year increase in Q2 net profit to ₹380 crore, while revenue rose 21.7% to ₹2,484 crore, indicating continued strength in hospitality demand.
12. PC Jeweller Reported a 58% year-on-year rise in Q2 consolidated profit to approximately ₹331 crore, with revenue increasing 27.8% to ₹1,055 crore.
13. Jindal Stainless Reported an 11% year-on-year increase in Q2 consolidated net profit, drawing attention to stainless-steel demand, input costs and margins.
14. L&T Technology Services Reported strong Q2 profit growth and announced an interim dividend, putting the spotlight on engineering and technology-services demand and its earnings trajectory.
15. Petronet LNG Signed a binding term sheet with Gruner Renewable Energy to establish a joint venture, signalling a move to explore opportunities in the energy-transition and related infrastructure space.
🌍 Major Global Developments This Week
1. Middle East Tensions Escalate Intensified Houthi attacks on Saudi Arabia and concerns over energy infrastructure increased fears of disruptions to global oil supplies, putting energy markets and investor sentiment under pressure.
2. Strait of Hormuz Supply Risk Remains in Focus Renewed concerns around shipping through this critical oil route kept geopolitical risk elevated, with potential implications for crude prices, freight costs and global inflation.
3. European Economic Growth Slows The eurozone’s flash composite PMI eased to 51.9 in October from 53.1 in September, indicating slower expansion amid higher energy costs and renewed weakness in France.
4. China’s Industrial Activity Improves China’s industrial output grew 5.5% year on year in September, while retail sales rose 1.1%. The data showed continued manufacturing activity but relatively subdued consumer spending.
5. Global Markets Turn More Defensive Rising energy prices, geopolitical uncertainty and concerns about the cost and returns of AI investments weighed on risk appetite, increasing attention on earnings quality and valuation.
🏛️ Economic & Policy Developments
1. India’s Inflation Rises India’s consumer inflation increased to around 5.5% in September, driven by food, fuel and broader price pressures. Higher inflation could complicate the outlook for monetary policy and household consumption.
2. UK Inflation Moves Higher UK CPI inflation rose to 3.5% year on year in September from 3.1% in August, adding to concerns about persistent price pressures and the future path of interest rates.
3. China’s Manufacturing Output Expands Industrial production grew 5.5% year on year in September, with technology-related manufacturing remaining comparatively strong. The figures are relevant to global industrial demand and commodity consumption.
4. Eurozone Business Activity Loses Momentum October’s preliminary PMI showed slower growth and rising input costs. The combination of weaker momentum and energy-driven inflation presents a challenge for European policymakers.
5. Markets Prepare for Major Central Bank Decisions Investors are watching the upcoming US Federal Reserve and European Central Bank meetings for signals on interest rates, particularly as elevated energy prices complicate the inflation outlook.
🛢️ Commodities & Currency Developments
1. Crude Oil Surges on Supply Concerns Brent crude rose to around $117 per barrel by Friday, gaining roughly 6% over the week as attacks on Saudi Arabia heightened fears of supply disruptions. Higher oil prices could pressure fuel-importing economies such as India.
2. Natural Gas Remains Sensitive to Energy-Supply Risks Natural-gas prices were influenced by seasonal demand and broader energy-market uncertainty. Potential disruptions to global energy flows remain a key risk for gas-importing regions and energy-intensive industries.
3. Gold Prices Weaken Gold declined during the week, with international prices around $4,060 per ounce by Thursday’s settlement. Higher energy-driven inflation and changing interest-rate expectations influenced demand for the precious metal.
4. Silver Faces Selling Pressure Silver prices also fell during the week, reflecting weakness across precious metals and concerns about the global growth outlook. Its industrial uses make it sensitive to both investor demand and manufacturing expectations.
5. US Dollar Strengthens Late in the Week The dollar recovered on Friday as Treasury yields and safe-haven demand increased amid geopolitical tensions. Currency movements remain important for emerging markets and global capital flows.
6. Rupee and Other Emerging-Market Currencies Face External Risks Higher crude prices and shifts in dollar demand could influence the rupee and other oil-importing economies’ currencies, affecting import costs and domestic inflation.
Why It Matters
Energy prices are the key risk:Rising crude prices could increase India’s import bill, pressure corporate margins and add to inflation.
Earnings remain stock-specific:Quarterly results and management outlooks are driving sharp differences between companies, particularly in IT, finance, infrastructure and manufacturing.
Inflation complicates rate expectations:Higher price pressures may limit the flexibility of central banks to ease monetary policy.
Global growth signals are mixed:China’s industrial output remains firm, while European business activity is slowing, creating an uneven outlook for cyclical sectors.
Geopolitical uncertainty supports volatility:Middle East tensions, shipping risks and currency movements are likely to remain important factors in cross-asset market sentiment.
Relative Strength (RS) vs. Relative Strength Index (RSI)
Definition
Relative Strength (RS) compares the performance of one stock or index against another benchmark to identify which is outperforming.
It is different from the Relative Strength Index (RSI), which measures the momentum of a single stock or index using a scale from 0 to 100.
Remember:RS tells you what is outperforming; RSI tells you how strong the recent momentum is.
How It Works
Relative Strength (RS):Compare a stock's performance with NIFTY 50 or its sector index.
Rising RS:The stock is gaining relative performance against the benchmark.
Falling RS:The stock is losing relative performance against the benchmark.
RSI:Measures the speed and magnitude of recent price movements; readings above 70 are traditionally considered overbought, while readings below 30 are traditionally considered oversold.
Example: Stock Selection
Suppose over one month:
Instrument
Price change
NIFTY 50
+3%
Stock A
+9%
Stock B
+1%
Stock A has outperformed NIFTY by 6 percentage points, while Stock B has underperformed by 2 percentage points.
A trader looking for bullish opportunities may investigate Stock A first, then check its trend, volume, valuation and risk before making a decision.
Why It Matters
Relative Strength helps investors identify potential market leaders and laggards.
During a broad market rally, relatively strong stocks may offer better trend-following opportunities than stocks that consistently underperform the benchmark.
⚠️ Risk / Common Mistake
A stock can outperform NIFTY while still falling, if NIFTY falls more sharply.
Strong relative performance does not guarantee future outperformance.
A high RSI does not automatically mean a stock should be sold; strong trends can remain overbought for extended periods.
Key Takeaway
Don't just ask whether a stock is rising. Ask whether it is rising faster than its benchmark.
Pro Tip
Build a watchlist of stocks whose relative performance against NIFTY 50 and their sector index is improving. Then look for a clear price breakout, supportive volume and a predefined stop-loss.
This combines relative strength with price actioninstead of relying on a single indicator.
Community Win
Wisdom of the Week
“The investor’s chief problem—and even his worst enemy—is likely to be himself.”
— Benjamin Graham
Learning Takeaway
Falling markets test emotional discipline more than intellectual ability.
Fear can turn temporary volatility into impulsive decisions.
A calm mind helps separate market noise from meaningful changes in fundamentals.
Reacting to every decline can cloud judgment and undermine a well-considered strategy.
When markets fall, pause before acting, revisit the facts, and make decisions based on evidence rather than fear.
Cheers, Tapas Chandra SEBI Registered Research Analyst | INH000026381 PGP (Research Analysis) | CMT Level 3 Author of Invest or Regret, The Power of Tradesting & The 3D Market Model | Ex-JPMorgan Chase
Questions, insights, or lessons from the markets this week? Just hit reply—we read every message and appreciate hearing from our readers.
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