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  • Why Are Large Caps Falling Like Mid & Small Caps?

    Why Are Large Caps Falling Like Mid & Small Caps?

    Traditionally, we assume that large-cap stocks are safer and more stable than mid and small caps, especially during a market downturn. They’re expected to fall less, right?

    But right now, large caps are taking a hit just like mid and small caps. Why is this happening?

    The Two Big Reasons:

    Massive FII Sell-Offs:

    • Foreign Institutional Investors (FIIs) have been aggressively selling their holdings in India for months.
    • Since FIIs primarily invest in large caps, their exit is hitting large-cap stocks hard, even those associated with the top online stock broking company and other major financial players.

    Mutual Funds Playing It Smart:

    • Many mutual funds had been holding cash in their mid & small-cap schemes, waiting for better entry points.
    • As the market dipped, they deployed this cash to buy mid & small caps at lower valuations, softening their fall.

    Global Factors Adding Fuel to the Fire:

    • DXY Rising → A stronger US Dollar Index makes emerging markets (like India) less attractive for FIIs.
    • China Looking Better → FIIs are shifting capital into undervalued Chinese stocks.
    • US Bond Yields Rising → The US 10-year bond yield is offering safer, high returns, making Indian equities, including those from the top online share broking company in India, less appealing.
    • India’s Growth Concerns → Worries about GDP growth and expensive valuations are keeping investors cautious.
    • INR Depreciation → The rupee has hit an all-time low of ₹87/USD, raising fears of further devaluation.

    What Could Happen Next?

    1. FII Selling Slows Down → If FIIs reduce selling, it could signal a market bottom.
    2. US Bond Yields Stabilize → A cooling-off in yields might bring FIIs back to Indian equities.
    3. DXY Weakens → A weaker dollar could lead to renewed FII inflows into emerging markets.
    4. INR Stabilizes → Currency stability boosts investor confidence.
    5. DII Buying Shifts to Large Caps → If domestic institutions start favoring large caps, it signals renewed trust.
    6. Retail Investors Step In → A steady flow of SIP investments could indicate the worst is over.

    Final Takeaway: Stay the Course!

    • Market corrections are normal. Stick around, and they won’t feel as scary.
    • India’s economy remains strong. Corporate and national balance sheets are healthier than ever.
    • Long-term investors should keep buying during dips. Some of the best Indian stock brokers still see long-term potential despite the volatility.
    • Short-term investors, take note: Never invest money in equities that you’ll need soon. Stick to safer alternatives.

    Stay patient, stay invested, and remember: market volatility is an opportunity, not a threat!

    For more information, visit https://www.indiratrade.com/

  • DeepSeek: The AI Underdog That Shook Wall Street

    DeepSeek: The AI Underdog That Shook Wall Street

    The U.S. stock market went haywire in January when tech investors woke up to a $1 trillion wipeout in a single day. That’s right—Nasdaq dropped 3.1% on January 27th, marking its worst fall since December 2024. But what caused this chaos?

    One word—DeepSeek.

    This AI disruption has rattled Wall Street, and for good reason.

    Meet DeepSeek: China’s Answer to OpenAI & Google

    DeepSeek is China’s response to AI giants like OpenAI and Google—but here’s the kicker: it rivals GPT-4 while using far less computing power. That’s a game-changer, and it’s shifting the global AI landscape faster than anyone expected.

    Founded in 2023 in Hangzhou by Liang Wenfeng, DeepSeek focuses on developing advanced large language models (LLMs). In simple terms, it looks like ChatGPT, behaves like ChatGPT—but isn’t ChatGPT at all.

    So why is everyone losing their minds now? Let’s break down the past week’s rollercoaster ride.

    Disruption Just Got Disrupted: DeepSeek R1’s Grand Entry

    DeepSeek just dropped its latest AI model—DeepSeek R1—and the impact has been seismic.

    Think of it as an AI-powered chatbot that can:

    • Write emails
    • Solve math problems
    • Translate text
    • Write code for engineers
    • Engage in human-like conversations

    Sounds familiar? It should—it’s essentially what OpenAI’s ChatGPT does. But here’s where it gets wild.

    DeepSeek’s $6 Million Trick: Doing More With Less

    In December 2024, DeepSeek published a research paper claiming that training their latest model cost just $6 million using Nvidia H800 chips.

    To put that into perspective:

    • OpenAI’s GPT-4 training cost? Over $100 million.
    • Google’s AI budgets? Billions.

    So, what’s DeepSeek’s secret sauce?

    1. Efficient Training (Less GPUs, More Brains)

    Instead of burning cash on thousands of GPUs, DeepSeek optimized its training setup, cutting costs while maintaining performance.

    1. Smart Quantization (Think of It Like AI Dieting)

    By reducing precision in computations without losing accuracy, DeepSeek’s models run faster while consuming less memory. Imagine taking shorthand notes instead of writing a full textbook—same knowledge, less effort.

    1. API That Just Works (For Developers, By Developers)

    DeepSeek’s API design mirrors OpenAI’s JSON-based endpoints, making it seamless for developers to switch from proprietary models.

    Naturally, lower costs = cheaper AI access. DeepSeek released its chatbot for free, shaking up the entire industry. The impact?

    Nvidia lost $17 billion in market capitalization as its stock plunged 17% in a day.

    DeepSeek’s Real Magic? Reinforcement Learning Done Right

    DeepSeek isn’t just building an AI that gives the right answers—it’s training AI to think smarter.

    How? By Reinventing Reinforcement Learning (RL).

    1. Reward Modeling: Instead of simply rewarding correct answers, DeepSeek ranks responses based on clarity, coherence, and reasoning depth.
    2. Proximal Policy Optimization (PPO): This prevents AI from overfitting by ensuring it doesn’t change too much at once—keeping responses balanced.
    3. Generalized Reward Policy Optimization (GRPO): This method compares multiple AI responses to the same question and picks the best one.

    By combining efficient training, clever RL techniques, and developer-friendly APIs, DeepSeek is making AI faster, cheaper, and smarter.

    Final Thoughts: DeepSeek’s Disruption Is Just Beginning

    DeepSeek is proving a bold new reality:

    • AI doesn’t have to be expensive to be powerful.
    • Open-source models can still outperform billion-dollar companies.
    • The AI war is far from over—and DeepSeek just threw a major curveball.

    With OpenAI, Google, Meta, and Anthropic scrambling to respond, one thing is clear: DeepSeek is redefining the AI game.

    The question is—who’s next in line for disruption?

    For investors looking to stay ahead in the evolving AI and IT sector, Indira Securities offers expert insights and stock recommendations.