Sectoral Shifts- The Unspoken Truth of Making Money....

 

"Those who cannot change their minds cannot change anything."

                                                                - George Bernard Shaw..

This blog is dedicated to all, but specifically to those who are using the basic tools of fundamentals and technical analysis in the market and still not getting desired returns from the stock market. 

In last few blogs, we noticed the volatility of the stock market and how big players / smart money playing the role in roller coaster ride of stock market, creating the fear factor in retail investors. In the previous weekly options expiry of Nifty (every Thursday of the week), we saw index in the green but all the stocks were in the red. We also noticed that the Nifty is not letting go the important levels. Bulls and Bears are literally fighting to the death for the dominance on the market. In above all, how retail investors can save their own interest is the question as they have every right to protect their own profits in the zero sum game of the stock market. I can say the investor / trader who is experienced one, will not take the risk and will book the profits after they are reaching the desired profits or they must be using some technical parameters to decide the same. But how to maintain profits going and not losing to market volatility is what I am going to discuss in this blog.

The very basic important characteristic of the money is MONEY IS NEVER STAGNANT. Money keeps changing the direction with the opportunities in the market, then be it on stock level or industry level or sector level or asset level or at country level. Money always keep moving on DAILY basis. We can closely monitor the movements of the money to make money in the stock market, and believe me you will never get disappointed by doing so. 

I am personally tracking the sectoral movements of the FPIs since few years now, the movements not only helps in investing in right direction but also suggests entry and exits of the stocks. To begin with let's see below the sectors and the percentage allocation of each sector in Nifty 50, the data is as on last trading day of previous month.

source: www.nseindia.com.

This information is very generic and most of the retail traders/ investors knows the above figure. But what most of them misses out is the percentage allocations in the above figure along with the sub sectors, they keep changing every fortnightly and NSE publish them on monthly basis. Even sectoral change data of FPIs are getting published on fortnightly basis, when the shifts are happening on daily basis. There are few sites which provides that data on subscribing to the site but I will not mention anything here as I am not promoting anything. 

Lets see the publically available previous data from NSDL site which shows the fortnightly sectoral shifts in the stock market. 

                                                                 Table 1.  Source: NSDL

I have highlighted few rows as I want to give the data points on the selected sectors. If you observed closely, the Green and Red highlighted sectors are outliers while orange is nominal but interesting data.

Considering the highest growth in AUC within fortnight, in the period of 15th Jan 2024 to 31st Jan 2024  FPIs 6% of overall distribution goes to Telecommunication sector. Correlating this data in the market cap wise stocks of telecommunication sector, let see below table:

                                                              

                                                                            Table 2.
 

In above table I have mentioned the prices after the data was published on NSDL sites. Above data explains all. With the volatility in the market this sector has shown the promising growth to depend on. 

Considering the second best sector which is Oil & Gas, data shows similar behaviour. 

                                                                            Table 3.

The most negative sector for the mentioned period was Media entertainment & Publications where FPIs reduced the funds by almost 15%. The same is replicating in the stocks.

                                                                            Table 4. 

We can clearly see that top market caps from the sectors are reciprocating to negativity. 

The Forest material sector is the one where we can say that there might be ongoing sectoral shift, for that I will share the extra data for the sector from my records. 

Table 5.

Clearly from Table 1 we can see that FPIs are positive by 2% but table 5 shows complete negativity. 

Below table shows that forest material sector in last 6 months received around 11% of FPIs moneyflow while the last fortnight suggests the sector wide negativity. 

From the above data, the signals are pretty clear. One who is depend on Fundamentals and Technical analysis will definitely gets the aid of this data to take the necessary calls. 

The above data once again proves that not just stocks but whole sectors dances on the tune of FPIs.

That is it for this blog, I hope you all have got little different insight from above data.

Open to every single feedback, critics, suggestions for the above data, please put them in the comments. Let's grow together......

Disclaimer: 

1. This data is for your information only. I am not recommending any transaction in any segment of the Stock Market here. 

2. The above stocks are selected on the basis of their market capitalization in their respective segment only. Kindly do not take any position based on any of the above shared data. Kindly do your own analysis and consult your financial advisor. 

3. The data mentioned are available publically, you can cross check on your own. 

4. These are all personal readings and observations based on the personal data records, I may be completely wrong on above data.

MUTATIO IN DOMINATIONE in Indian stock Market?

Hi All, 

I am sharing the blog after almost 6 Months. I was forced by data to write the blog, specially the volatility.

All those who are traders knows that there is only one true god of the market VOLATILITY, the trader who understand the volatility are the those 10% traders who make the money in the stock market. SEBI made sure that everyone focuses on 90 % of the failed traders with very great intention to protect the money of retail investors. Now a days we see the disclaimer after opening our any trading platforms. 

Concept of volatility is the most complex parameter in the stock market followed by liquidity. I am not writing any of the topic in details but here my intention will be to touch upon the data points which suggests the market movements beyond the conventional fundamental and technical study of the market. In this blog I will try to cover the dynamics of the current Indian stock market with few data points.

We all know, that there are 4 main players of the stock market, I have mentioned in my previous blogs also. They are FPIs, DIIs, Prop Desk, Clients (Retail Investors). We will understand the assets under each of them with the help of following table.

source: NSDL, FPI monitor, category wise AUC data. 

The above data table gives the allocation of the all the players in the Indian Equity market. Among them you can clearly make out who is the boss in the India Stock market. Here I will not give the categorisation, as you all readers can figure that out.

Another data suggests that FPIs holds 21% of overall holdings in the companies which makes NIFTY 500 while DIIs hold 14% all all shares in holdings. 

These figures leads to another question that if the FPIs are only controlling the market then now a days, how come the volatility has risen to highest level? I would like to give the honest answer based on the data I gather on daily basis by tracking the big players movement in the market. This conclusion of mine can be completely wrong but yes there is bright chance that the conclusion is correct based on data points given below.

Among the FPIs, I am presenting top 10 countries with asset under custody (only equity), the data is for Dec 23 and Nov 23. Latest data for Jan 24 is not yet available. 

              Source: NSDL, Countrywise AUC data.

Referring the above table we can clearly see the US FPIs are holding the highest assets under their custody, that means AUC USA= 2.85 X (AUC of Luxembourg+AUC of Singapore) who are 2nd and 3rd highest asset holder under their custody.

In my view, Singapore, luxembourg, Japan FPIs are SUPER bullish on the Indian Stock market along with others. US FPIs are also showing that they are positive on Indian market, but now they hold more power to control the Indian stock market, as SEBI has removed the restrictions on SHORT positions in the market. It has been observed in the past that DIIs are the bulls while specifically US FPIs are the big bears of the market. This time singapore, luxemburg, Japan FPIs along with other fpis also have joined BULLs gang, cornering US FPIs to counter the game of shorts they play in consolidation phase of the market. Past records shows that market has showed sideways moves before central elections. 

Considering that very same thing big players can only make the profits by shorting the market in Futures and hedging it with CASH. So we are observing the following data of FUTURE POSITIONS of the big players. 

                                               Source: www.nseindia.com

The above data suggests that FIIs are currently carrying 1,44,454 Future Index short positions while only 69,557 Future Index long positions. Surprisingly DIIs too are carrying 90258 Future index Short positions and only 56219 Future index long positions but in my opinion they are hedge for the tremendous cash buying they are doing in the market currently.

By just shorting the futures index, can US FPIs pull down the market against 3 other big players? Especially they know the INDIA GROWTH Story? 

:-Yes, they can do so by selling in CASH market whenever is required. 

For last calendar year, FIIs are net sellers in cash segment with selling of -43,757.2 INR Crores while the whole credit goes to Diis for their net buying in cash segment with buying of 1,36,152 INR Crores. The selling of Fiis is not at all worrisome as it is well within the limits of consolidation state of the market.

For this calendar year, Fiis are already negative with -35977.87 INR Crores and Diis are positive  with 26743.63 INR Crores, this data is for Jan 2024 only. 

Considering the data above, I can say that there is well expected TUG OF WAR in Indian stock market before elections, which gives the reason for High Volatility in the market. Indian stock market since March 2020, when Nifty touched 7500, has not seen the negativity and Index has grown almost 3 times in last 4 years. Macro economically India Story still has gas left, but one way up market is always alarming. Taking caution in these situations is never harmful.

The sharp moves in the market currently covering 200-400 points on Nifty in single trading session is indicator that match between big players is for domination on Indian equity market. This market is showing the deadly mood swings even in Intraday covering 60 to 100 points in just 5 minutes, which previously was a day movement. 

With this I will conclude today's topic that, small investors/ traders like you and me should follow the strict rule of profit booking and stop losses in current market. It is not wise to have FOMO in this current market. I am not saying that market can turn super bullish or super bearish but It will be welcoming move if the market shows healthy dip. Which eventually may suggests consolidation phase for a while. 

Open to all the suggestions/ Critics/ Praising to this information. Kindly share your thoughts in comment section.

DISCLAIMER: All the data given above is available in public domain, I have mentioned the respective source of the data. This is personal opinion based on data records which I maintain. This information is strictly for your information only. There is no suggestion of any transaction in any segment of the market.