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Wall Street had a subdued start on Wednesday, with investors awaiting further indicators on the state of the economy and potential interest rate reductions, a week after the Federal Reserve initiated its policy relaxation cycle.

Banking and finance stocks have earned stellar returns over the past few years, thereby attracting retail investors. The sector index BSE Bankex has gained over three times since April 1, 2020, the year of pandemic, closely tracking similar gains in the benchmark Sensex.

The Indian rupee strengthened to 83.59 per US Dollar due to sales of the greenback from local corporates and inflows in local stocks and bonds. These flows are seen after the US Federal Reserve cut interest rates last week, and in speculation of another rate cut by the US in November, currency dealers said.

The weight of leading banks in the Nifty 50 index has decreased from a high of 32% in July 2023 to the current 27.7%, according to a Phillip Capital report. This underperformance is attributed to the subpar performance of HDFC Bank, the third largest stock by market capitalization in India.

Sector-wise, buying interest was observed in metals, realty, power, and utilities, while IT, consumer durables, FMCG, and auto stocks faced selling pressure.

Long unwinding occurs when investors sell stocks or positions they have held for an extended period, either to secure profits or to exit in anticipation of a potential market downturn.

Nifty and Sensex reached new highs, driven by energy and banking stocks. HEG and ZEE Media surged, while Easy Trip and Dabur faced declines amid market shifts.

Domestic benchmark indices Sensex and Nifty closed at fresh record highs on Wednesday, driven by gains in banking and energy stocks. Sensex rose 256 points to settle at 85,169, while Nifty added 64 points to end at 26,004. Despite the highs, market capitalization of all listed companies on the BSE declined by Rs 83,219 crore.

​So, if these growth forecasts hold, then there is some justification for a little higher valuation. Though, in general, I would say, yes, the valuations have become quite extreme for some of these spaces.

Despite a Rs 4,700 crore profit in FY24, Zerodha has avoided an IPO. CEO Nithin Kamath cites reasons like market volatility, unpredictability of future events, and focus on long-term customer-centric decisions. Zerodha is building other verticals to diversify risks and is not in immediate need of funding. The company wants to avoid the burden of investor expectations and maintain its focus on long-term customer-centric decision