In December 2023, the Nifty 50 index in India made a new high at 21731 for the first time and touched an intramonth high of 21801. At the end of March 2026, we are very close to that level. Many stocks, especially in the broader market, are below the December 2023 level.

To get a sense of the word on the street, I spoke to a few of my friends who have been investing professionally since the early 2000s. The response was unanimous: “I don’t know where the markets will bottom. I haven’t seen anything like this earlier.”

Those who were looking to take advantage of the fall during the first leg of the crash rescinded their views and wanted to wait longer before deploying their funds. Their statements surprised me. I wondered how someone who has been an investor for more than 20 years has not seen anything like this before. The past two decades, especially, have seen a high share of volatility and crashes.

Certainly, they have also read about the market crashes that happened in the last century. I agree this correction may not be exactly the same as the previous ones, but as Mark Twain said, “History doesn’t repeat, but it does rhyme.”

To make superior returns in the market, an intelligent investor is greedy when others are fearful. But what stops us from doing what an intelligent investor must do?

Biases that hold us back from taking advantage of this fall are myopic loss aversion and recency bias. In this note, I will talk about a psychological concept that affects even highly experienced investors. I present a hypothesis, based on the concept of ‘Two Selves’ given by Nobel Prize winner Daniel Kahneman, to explain why people feel “this time it’s different.”

THE TWO SELVES

Daniel Kahneman is the first psychologist to win a Nobel Prize for economics. In his book, Thinking, Fast and Slow, he talks about how there are two selves in everyone—a ‘Remembering Self’ and an ‘Experiencing Self’. He explains it with an example. One of his students approached him at the end of a lecture and told him about a symphony he had been listening to. “It was absolutely glorious music and at the very end of the recording, there was a dreadful screeching sound.” And then he added, quite emotionally, “It ruined the whole experience.” According to Kahneman, the student’s experience was not ruined; it was the memory of the experience that was ruined. Although the student enjoyed those 20 minutes of good music, that experience did not count because he was left with a bad memory of it.

The ‘experiencing self’ lives in the present. It is the ‘experiencing self’ that the doctor approaches when she asks, “Does it hurt now?” The ‘remembering self’ is the one that keeps score and maintains the story of our life, and it is the one that answers when the doctor asks, “How have you been feeling lately?” The ‘experiencing self’ lives moment to moment, but not all those experiences make it to memory. The ‘remembering self’ is a storyteller and keeps what we derive from our experiences.

There are many areas where this concept of two selves applies. Patients tend to have better memories of surgery if the pain recedes towards the end rather than if it ends with peak pain. Take the case of parenting: parents generally have a very good memory of raising their children. However, their day-to-day experience of raising them may not be very pleasant. How about holidays? If you had a great holiday but it ends with you losing your passport and wallet, the ‘remembering self’ will paint the story with quite a bit of pain.

HOW IS THIS ALL RELEVANT TO THE MARKETS?

Here is my hypothesis: a lot of investors have experienced investing during crashes in the past. They carry a memory of how crises are an opportunity to increase allocation towards equity markets, and how, ultimately, they make great returns when the markets bounce back. At the onset of every new crash, these investors recall those memories. The ‘remembering self’ recites to them the story of how profitable investing during bad times is.

However, the ‘remembering self’ has not captured all the moments of the past. The ‘experiencing self’ went through every moment of fear, agony, and anxiety that comes with contrarian investing during previous crashes. But most of these moments are lost, and only the happy endings dominate the story.

During the current market fall, the ‘experiencing self’ is living the pain of a contrarian stance every day. And within a few days of the fall, one feels things are different from what the ‘remembering self’ narrated. “This time it’s different!” Although investors undergo the same fear and pain during every large down move, the story feels different. They are likely to feel that conditions were better the last time. The phenomenon is true for raging bull markets too. Even though investors carry the scars of participating in past bubbles, they are pulled into a new one with the catchphrase, “this time it’s different.”

Every few years, the markets correct and many investors end up selling close to the bottom due to fear and panic. The proverbial market pendulum swings towards extreme pessimism. With the right temperament, an intelligent investor can take advantage of these cycles. True, one cannot catch the exact bottom or top. Staggering investments during such times through SIPs or STPs can help mitigate near-term volatility risk while ensuring participation across cycles.

Happy Investing!

(Source: NSE Indices)

(The author of the article is Nimesh Chandan, CIO, Bajaj Finserv Asset Management Limited)

Shares of BSE Ltd and InterGlobe Aviation, the parent company of IndiGo, may be poised to join the Nifty 50 index in the upcoming reshuffle, according to a report by CNBC-TV18, citing sources familiar with the matter. IndusInd Bank and Hero MotoCorp are among the names that could potentially be removed from the benchmark index in the next review, the report added.

The changes are part of the semi-annual review of the Nifty 50 index, which is expected to take place in August, with the revised composition likely to take effect from September.

BSE is likely to meet all eligibility norms, including listing and trading requirements, despite being listed only on the National Stock Exchange (NSE). Inclusion in the Nifty 50 is typically determined by factors such as average free-float market capitalisation and liquidity thresholds.

The development, if confirmed, would mark a significant milestone for Asia’s oldest stock exchange, which has seen strong performance in recent months. InterGlobe Aviation, India’s largest airline operator by market share, has also demonstrated consistent market presence, potentially strengthening its case for inclusion.

Also read: HDB Financial Services GMP at 6.3% ahead of IPO. What should investors do?

On the other hand, IndusInd Bank, which has faced challenges in maintaining growth momentum, and Hero MotoCorp, grappling with demand pressures in the two-wheeler segment, are seen as likely exclusion candidates based on the existing index criteria.

In the last year, shares of BSE have given a stellar 224.49% return to its investors, while those of IndiGo have surged by 26.44%.In contrast, IndusInd Bank shares have dropped 44.76% during the same period, while Hero MotoCorp has declined 21.82% over the past year.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

Shares of Zomato and Jio Financial are likely to remain in focus after the two companies were added to the Nifty 50 index as part of the semi-annual rejig. These stocks made an entry in the index at the cost of Bharat Petroleum Corporation (BPCL) and Britannia.

The decision came in after the NSE sub-committee’s meeting which was held on Friday, February 21. However, the changes will become effective from March 28, 2025, i.e. close of March 27, 2025.

Their inclusion in the Nifty 50 index comes on the basis of the 6-month average free-float market capitalisation within the eligible universe, the note from the committee said, adding that it is at least 1.5 times the 6-month average free-float market capitalisation of the smallest constituents Bharat Petroleum Corporation and Britannia Industries.

Zomato’s average free-float market capitalisation stood at Rs 1,69,837 crore while that of Jio Financial Services was at Rs 1,04,387 crores, an NSE note said. As for BPCL it was at Rs 60,928 crores and for Britannia Industries it was at Rs 64,151 crores.

Domestic brokerage firm JM Financial’s projections suggest that Zomato’s addition to the index could attract passive inflows of $702 million, while Jio Financial might receive $404 million as index funds rebalance their portfolios. Conversely, Bharat Petroleum and Britannia Industries are expected to witness outflows of $240 million and $260 million, respectively, as they exit the 50-share benchmark.

Also read: Swiggy shares in focus as company plans Rs 1,000 cr investment in Scootsy’s expansion

According to the NSE’s note, InterGlobe Aviation (Rs 86,688 crores) and Hindustan Aeronautics (HAL, Rs 82,993 crores) were not considered for inclusion in the Nifty 50 index because their average six-month free-float market capitalizations were less than 1.5 times that of the next lowest-ranked Nifty constituents, Hero MotoCorp (Rs 64,181 crores) and Eicher Motors (Rs 66,764 crores).

Only the stocks that are available for trading in NSE’s Futures & Options (F&O) segment are eligible for inclusion in the index.

The Nifty index undergoes semi-annual rebalancing by NSE Indices, a subsidiary of India’s largest stock exchange. This process follows a structured timeline, with January 31 and July 31 as the cut-off dates each year. Stocks are assessed based on their average performance over the past six months to ensure the index aligns with current market trends. NSE Indices issues a four-week advance notice before implementing any changes, giving market participants time to adjust.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

The past sessions for the markets stayed quite trending; the headline index continued with its upmove. While extending their gains, the Nifty 50 Index ended the week on a very strong note. Witnessing a strong momentum on the upside, the markets expanded their trading range as well. The Nifty traded in a range of 393.65 points during the week and closed near its high point forming a fresh lifetime as well as a fresh closing high for itself. The volatility dropped a bit lower; the India Vix declined marginally by 1.18% to 13.39 on a weekly basis. While the markets rose in almost an unabated manner, the headline index posted a net weekly gain of 412.75 points (+1.66%).

The month ended as well; Nifty posted a monthly gain of 284.75 points (+1.14%) The markets are in a strong uptrend; however, once again it has created a situation wherein they have sharply deviated from their mean. This warrants a very careful approach towards the markets. The nearest 20-week MA is placed at 23.659 which is 1576 below the current close. The 50-week MA which is placed at 22104 is 3131 points below the current level. All these things point at the markets deviating from their mean once again; this leaves them prone to volatile profit-taking bouts once again at higher levels.

This also highlights a need for vigilant protection of profits with every upmove that may take place as we travel with the trend. Monday is likely to see a stable start to the day. The levels of 25400 and 25495 are likely to act as resistance points. The supports come in lower at 23900 and 23710 levels.The weekly RSI is 75.03; it remains in a mildly overbought territory. The RSI shows a bearish divergence as it did not make a new high while the Nifty formed a fresh closing high. The weekly MACD stays bullish and remains above its signal line.

The pattern analysis of the weekly chart shows that the markets have taken out its immediate high of 25078; it is likely to continue trending higher while raising the support levels higher as well. Going by the derivatives data, the immediate short-term support has been dragged higher to 25000 levels; any violation of this point is likely to push the markets back into broad consolidation. The market breadth remains a concern; the breadth is not as strong as it should be otherwise if such strong trending moves are taking place.

All in all, there is nothing on the charts that suggests a correction in the markets. The ongoing uptrend is strong; the easiest thing one can do is to keep traveling the trend.

However, at the same time, we should not disregard the fact that the markets are once again significantly deviated from their mean. It becomes all the more important that as we follow the trend, we do it very mindfully while guarding the profits vigilantly at higher levels. It would be prudent to keep actively trailing the stop-losses as that would help protect the bulk of the profits. The texture of the markets is a bit defensive; stocks from the PSE, Pharma, IT, FMCG, etc. are expected to do well. Overall, a selective and cautious approach is advised for the coming week.

In our look at Relative Rotation Graphs®, we compared various sectors against CNX500 (NIFTY 500 Index), which represents over 95% of the free float market cap of all the stocks listed.

Relative Rotation Graphs (RRG) show a distinctly defensive setup. The Nifty Pharma Index had rolled inside the leading quadrant in the previous week. This week, the IT and FMCG groups have also rolled inside the leading quadrant. These groups along with the Nifty Midcap 100 which is seen losing relative momentum are by and large expected to relatively outperform the broader Nifty 500 Index.

The Nifty Consumption Index which is in the weakening quadrant is rolling back towards the leading quadrant. Besides this, the Nifty Auto, PSE, and Realty indices are also inside the weakening quadrant.

The Financial Services index has rolled inside the lagging quadrant. The Nifty Bank Index, Infrastructure, PSU Bank, Metal, Commodities, and Energy groups are inside the lagging quadrant. Among these, the Energy, Commodities, and Infrastructure indices are showing some improvement in their relative momentum.

The Nifty Media index is inside the improving quadrant; however, it is seen losing its momentum.

Important Note: RRGTM charts show the relative strength and momentum of a group of stocks. In the above Chart, they show relative performance against NIFTY500 Index (Broader Markets) and should not be used directly as buy or sell signals.

(Milan Vaishnav, CMT, MSTA, is a Consulting Technical Analyst and founder of EquityResearch.asia and ChartWizard.ae and is based in Vadodara. He can be reached at milan.vaishnav@equityresearch.asia)

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

The markets continued with their unabated upmove in the week that went by and ended once again with net gains. While continuing with the advance the Nifty 50 Index extended its move higher. However, as compared to the previous week, this time, the trading range got narrower as the Index oscillated 408.30 points against 824 points.

This can largely be attributed to the absence of volatility. Against an increase of 4.72% as compared to the previous week, this week, India VIX came off by 8.02% to 12.69 on a weekly basis. While staying tentative at higher levels, the headline index closed with net weekly gains of 313.25 points (+1.30%).

Despite the up moves getting extended, the markets also continue to show signs of an impending consolidation at higher levels. The 24350-24450 zone stays a strong resistance area for the markets as indicated by the options data. We may not see any major corrective moves taking place but this certainly makes some measured retracement or consolidation imminent at current or slightly higher levels. Consistent Call OI addition at 24300 and higher strikes make this point more evident. This can also mean that if 24500 is taken out with conviction, the up move may further get extended but this would make the currently over-extended markets unhealthier than what they are now.

Monday is likely to see a quiet start to the week; the levels of 24450 and 24675 may act as immediate resistance levels. The supports come in lower at 24000 and 23735.

There is also a significant deviation from the mean that is observed as Nifty’s nearest 20-week MA and 50-week MA are as far as 1615 points and 2940 points respectively.This highlights the danger that the markets have even if they make even a little event to revert to their mean or even consolidate in a ranged manner. The weekly RSI is 74.44. It stays overbought and remains neutral without showing any divergence against the price. The weekly MACD is bullish and stays above the signal line.The pattern analysis shows that the Index has ended once again above the upper Bollinger band. This is quite bullish but it also has a possibility of the price pulling themselves back inside the band. As mentioned earlier, the 20-week MA is the nearest support which is placed 1615 points below the current levels at 22708. However, before this, a pattern support exists at 23800.All in all, the uptrend remains intact and there are no signs of any major corrective move taking place. The markets aren’t showing any signs of major weakness but they certainly look prone and stay vulnerable to measured retracement or ranged consolidation over the coming days. They stay quite overextended and remain deviated from their mean and this keeps them vulnerable at higher levels. It is recommended that as we travel with the trend, we also focus on guarding profits at higher levels. While keeping leveraged positions at modest levels, fresh purchases should be kept limited to defensive pockets and in those stocks that are showing improving relative strength. A cautious outlook is advised for the coming week.

In our look at Relative Rotation Graphs®, we compared various sectors against CNX500 (NIFTY 500 Index), which represents over 95% of the free float market cap of all the stocks Listed.

Relative Rotation Graphs (RRG) show that the Nifty Realty, Consumption, and Auto Indices are inside the lagging quadrant along with the Midcap 100 index; all these groups are seen taking a breather and giving up a bit on their relative momentum against the broader markets.

The Nifty Metal index has rolled inside the weakening quadrant. Nifty PSE, Infrastructure, PSU Bank, Commodities, and Energy groups are also inside the weakening quadrant.

The Nifty Services Sector Index and IT index are inside the weakening quadrant; however, both these groups are showing improving relative momentum and may show better relative performance against the broader Nifty 500 index.

Bank Nifty, Nifty Media, Financial Services, and FMCG indices are placed inside the improving quadrant; the FMCG Index among these is seen giving up on its relative momentum against the broader markets.

(Important Note: RRGTM charts show the relative strength and momentum of a group of stocks. In the above Chart, they show relative performance against NIFTY500 Index (Broader Markets) and should not be used directly as buy or sell signals.

The author Milan Vaishnav, CMT, MSTA, is a Consulting Technical Analyst and founder of EquityResearch.asia and ChartWizard.ae

(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)

Indian shares experienced fluctuations between gains and losses on Friday, ultimately closing slightly higher. However, they recorded their first weekly decline in three weeks as investors adjusted positions ahead of the outcome of the national elections this Tuesday.

The NSE Nifty 50 concluded with a 0.2% increase at 22,531 points, while the S&P BSE Sensex saw a 0.1% gain, closing at 73,961. Initially, both benchmarks surged as much as 0.7% in early trade before retracing gains. Over the week, they posted a 1.9% decline.

In other developments, following the conclusion of the 7th phase of elections on Saturday, nearly all exit poll surveys suggested a likely victory for the BJP in this Lok Sabha election.

The collective average of major exit polls points to the BJP-led NDA securing 374 seats in this election. This positive sentiment is expected to lead to a significant market rally on Monday.

Here’s how analysts read the market pulse:”On the daily charts, we can observe that Nifty consolidated within the range of the previous trading session and has formed an inside bar pattern which makes the extremes of the range 22,700 – 22,400 crucial levels to watch out for. A breakout on either side shall lead to a treading move in that direction. In terms of levels, 22,420- 22,313 is the crucial support zone while 22,820 – 22,900 is the crucial resistance zone from a short-term perspective,” said Jatin Gedia of Sharekhan.Rupak De of LKP Securities, said, “The highest call writing is visible at 23,000, while there is significant put writing at 22,500, indicating that the Nifty might oscillate between 22,500 and 23,000 in the next few days. However, a fall below 22,500 might trigger a correction towards 22,000.”That said, here’s a look at what some key indicators are suggesting for Monday’s action:

US market

The S&P 500 and Nasdaq posted losses for the week on Friday, breaking their five-week winning streaks, as investors digested an inflation report and assessed when the Federal Reserve might begin cutting interest rates.

The Dow rallied on Friday. The S&P 500 gained 44.53 points, or 0.85%, to end at 5,280.01 points, while the Nasdaq Composite lost 2.06 points, or 0.01%, to 16,735.02. The Dow Jones Industrial Average rose 595.78 points, or 1.56%, to 38,707.26.

European shares

European shares rose on Friday after softer U.S. inflation data spurred hopes of interest rate cuts by the Federal Reserve, while June rate cut bets for the eurozone remained intact despite hotter-than-expected inflation figures from the region.

The pan-European STOXX 600 index closed 0.3% higher but still recorded a second week of declines as euro zone bond yields spiked to mirror their U.S. counterparts on worries over interest rates remaining elevated.

Tech View: Long-legged Doji candle

Nifty formed a long-legged Doji candle on the daily charts to breach a 5-day losing streak as it ended 42 points higher at 22,531.

The 50-DMA is placed at around the 22,400 level, and a slip below this level could shift the test to the 22,300-22,260 zone. However, crossing 22,660 could resume the bullish trend, Om Mehra of SAMCO Securities said.

On the daily chart, the Nifty has now bounced back from close to the 50-day SMA after four sessions of losses. 14-day RSI at 50.33 is falling and remains below its 9-day EMA, which indicates that the momentum is weakening, chartists said.

Stocks showing bullish bias

Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade on the counters of NHPC, Ratnamani Metal, Honasa Consumer, GE Shipping, J&K Bank, and Medplus Health Services among others.

The MACD is known for signaling trend reversals in traded securities or indices. When the MACD crosses above the signal line, it gives a bullish signal, indicating that the price of the security may see an upward movement and vice versa.

Stocks signaling weakness ahead

The MACD showed bearish signs on the counters of Hindustan Zinc, Solar Industries, Sobha, Signature Global (India), M&M, and Indian Oil Corporation among others. A bearish crossover on the MACD on these counters indicated that they had just begun their downward journey.

Most active stocks in value terms

HDFC Bank (Rs 5,662 crore), Infosys (Rs 5,249 crore), RIL (Rs 4,442 crore), TCS (Rs 4,036 crore), Bharti Airtel (Rs 3,387 crore), ICICI Bank (Rs 2,937 crore), and L&T (Rs 2,375 crore) among others were among the most active stocks on NSE in value terms. Higher activity on a counter in value terms can help identify the counters with the highest trading turnovers in the day.

Most active stocks in volume terms

Tata Steel (Shares traded: 8.3 crore), Infosys (Shares traded: 3.7 crore), HDFC Bank (Shares traded: 3.7 crore), Power Grid (Shares traded: 3.7 crore), NTPC (Shares traded: 3 crore), ITC (Shares traded: 2.8 crore), and ICICI Bank (Shares traded: 2.6 crore) among others were among the most traded stocks in the session on NSE.

Stocks showing buying interest

Shares of Jindal Stainless, Adani Power, Godawari Power, Jupiter Wagons, Blue Star, and KNR Constructions among others witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure

Shares of Atul, Berger Paints, KRBL, Route Mobile, Tata Elxsi, Ramco Cements, and Anupam Rasayan hit their 52-week lows, signaling bearish sentiment on the counters.

Sentiment meter favours bears

Overall, market breadth favoured bears as 2,099 stocks ended in the red, while 1,732 names settled in the green.(

Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times)