Dow vs Nasdaq: Market Guru Anil Singhvi decodes opposite trends in both US indices
Zee Business Managing Editor and Market Guru Anil Singhvi on Tuesday talking about global cues and the US stock market explained why Nasdaq and Dow Jones, both US indices, have been responding opposite.
Zee Business Managing Editor and Market Guru Anil Singhvi on Tuesday talking about global cues and the US stock market explained why Nasdaq and Dow Jones, both US indices, have been responding opposite. While Dow Jones gained over 300 points, Nasdaq lost almost equal points on Tuesday trading session.
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Explaining this opposite behaviour of both the US indices, Zee Business Managing Editor said, "It is not like the Indian stock market where indices such as Nifty and Bank Nifty go in sync. These indices are directly linked to the economy. But in America, there is a difference. Dow is an old economy stock, while Nasdaq is totally new economy stocks. There is a huge gap in the way they respond. While Nasdaq corrected almost 11 per cent from the upper level, Dow created its life-time high on Monday. There is huge contradiction."
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Explaining it further, the Market Guru said a similar contrary movement was seen in March 2020. "At that point of time Dow was extremely weak and Nasdaq was gaining. Then new economy stocks like technology shares, which remained unaffected due to the lockdown, were performing. However, that trend has started to change with the economy opening up gradually. Now the focus is on old economy stocks. These stocks were beaten and undervalued, but with the change in reversal, Dow stocks are again in demand. This is a reverse trade from last March."
Talking about its repercussions on the Indian stock market, he said we have nothing to do with Nasdaq. We don't have new economy stocks like in Nasdaq, rather our share is more of Down style, which is related to the economy in a more direct way.
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