Nifty 50 Struggles Amid CPI Data and Global Volatility: Will IT Stocks Lead the Way or Will Market Correct?

NiftyTrader • December 12, 2024

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Index	Price	Change	% Chg
Nifty 50	24,548.70	-93.10	-0.38%
Nifty MidCap 50	16,463.85	-73.10	-0.44%
Nifty SmallCap 50	9,359.55	-107.65	-1.14%
Nifty Bank	53,216.45	-174.90	-0.33%
Nifty Financial	24,726.95	-76.10	-0.31%
BSE SENSEX	81,289.96	–236.18	–0.29%

At the close, the Nifty 50 was at 24,548.70 down by 0.38%

The Indian stock market kicked off December 12 with a rocky start. The Nifty 50 opened in the red, dipping by 0.38% and closing in the same downward trend at 24,548.70. The question on everyone’s mind: What’s next for Nifty? Can it hold its ground, or is a significant correction looming?

Nifty 50 opened in the red and closed at 24,548.70, down 0.38%
The market is facing selling pressure amid mixed global cues
A drop below 24,500 could signal a deeper correction

A Market Held in Suspense
Despite a promising global backdrop, the Indian market couldn’t escape the pressure. After initial optimism, profit booking took hold, pushing the Nifty back below the crucial 24,550 mark. But why? What’s behind this sudden pullback?

Profit booking pushed Nifty below 24,550 despite positive global signals
Nifty remains range-bound between 24,500 and 24,700
A decisive fall below 24,470 could trigger significant correction

Nifty Faces a Tight Squeeze – Will It Break?
The Nifty closed the day down 93.10 points, indicating a weakening trend in the short-term. Despite positive global cues, the Indian index showed signs of fatigue. Investors seem to be waiting for a fresh catalyst to reignite a rally. With a low India VIX suggesting less volatility, could this low volatility signal the calm before a storm, or are the bears just waiting for the right moment to strike?

Nifty closed down by 93.10 points, forming a bearish candlestick pattern
The India VIX hit an 8-week low, signaling less volatility
Investors are awaiting a new catalyst to restart the market rally

IT Stocks Shine as the Rest Struggle
Interestingly, IT stocks defied the market trend, with the Nifty IT index soaring past 46,000 for the first time. Investors are betting on a US Federal Reserve rate cut, boosting expectations for tech stocks, especially those benefiting from US revenues. Could the Fed rate cut be the lifeline the market is waiting for?

Nifty IT index hit a new high, driven by US rate cut hopes
US Federal Reserve rate cut expectations boost IT sector
The Fed’s rate decision next week could be a turning point for the market

CPI Data: The Ticking Time Bomb
As the market teeters, CPI data looms large, expected later today. Investors are watching closely, particularly food prices, as they will be a key indicator of future rate hikes or cuts. With inflation anticipated to fall, will vegetable prices hold the key to future market movements? The uncertainty is palpable.

CPI data release today will determine future rate trajectory
Investors are closely tracking food and vegetable prices
Inflation is expected to drop, but food prices remain a concern

Gold: A Safe Haven or an Overhyped Bet?
Meanwhile, gold saw a minor rise, inching closer to $2,700 per ounce, as investors hedge against possible market turbulence. As the US CPI data release approaches, gold traders are bracing for a volatile shift. Is this the calm before a gold rush or just another fleeting spike?

Gold trading at $2,700, recovering from the $2,600 support range
Upcoming US CPI data crucial for gold’s price movement
Gold may be a safe haven amid market uncertainty, but volatility is expected

The Key to Watch: 24,500
With the Nifty index holding above the key 24,500 level, traders are closely monitoring for any signs of a decisive breakdown. A clear fall below 24,500 could unleash broader selling pressure, while a sustained hold above could mark the beginning of a fresh rally.

Key support for Nifty at 24,500; a fall below this level may trigger selling pressure
Nifty remains within the range of 24,500–24,700 for the moment
Watch for a breakout or breakdown near the 24,500 level

What Will Happen Next?
The market stands at a crossroads. The range-bound movement is expected to persist unless a fresh catalyst emerges. The week’s CPI and WPI data will be crucial. Can the IT sector maintain its bullish trend? Or will broader market concerns weigh heavily on the Nifty? Only time will tell, but one thing’s for sure—the suspense is building.

Stay tuned as we watch the market’s every move! The next few days could define the future of the Nifty 50. Keep an eye on the 24,500 level and the upcoming inflation data. Will the bulls return, or will we see a deeper correction? The clock is ticking!

Rosneft and Reliance Seal Record-Breaking Oil Supply Deal
In other market news, Rosneft, Russia’s state-owned oil giant, and Reliance Industries have just signed the largest-ever energy deal between India and Russia. This 10-year agreement will see Rosneft supply nearly 500,000 barrels per day (bpd) of crude oil to Reliance, a deal worth around $13 billion annually at current prices. This deal represents 0.5% of global oil supply and further strengthens the energy ties between the two countries, even as Russia faces intense Western sanctions due to its actions in Ukraine.

Rosneft and Reliance ink $13 billion, 10-year oil deal
Deal supplies 500,000 barrels of crude oil per day to Reliance
Strengthens India-Russia energy ties amid global sanctions

Bank Nifty: Down by 0.33%

The market’s fate hung in the balance today as the Bank Nifty opened in the red, slumping by 0.33 percent, and ended the day in a dramatic dive, closing at 53,216.45. But it wasn’t just the Bank Nifty feeling the heat. The BSE Sensex also couldn’t escape the downward pull, dropping by 0.29 percent, and closing at a concerning low of 81,289.96.

📈 IT Sector: The Shining Star of the Day!

One sector that’s basking in the limelight is none other than the IT sector, surging ahead with an impressive 0.77% gain. Leading the charge are two industry giants:

Coforge Ltd.: Skyrocketed with a solid 2.14% surge, leaving investors thrilled.
Persistent Systems Ltd.: Followed suit with a strong 1.23% gain, reinforcing the sector’s upward momentum.

📉 Media Sector: The Unfortunate Loser!

While the IT sector shines, the Media sector finds itself in a far more precarious position, suffering a notable 2.29% drop. Here’s where the pain is most acute:

Dish TV India Ltd.: Tumbled down by a staggering -4.44%, raising questions about its next move.
Sun TV Network Ltd.: Not far behind, posting a steep decline of -4.37%, unsettling market watchers.

Foreign Institutional Investors (FII) and Foreign Portfolio Investors (FPI) have shown a net outflow of Rs. 3,560.01 crore. The numbers tell a worrying tale: while they bought shares worth Rs. 14,503.85 crore, they unloaded a staggering Rs. 18,063.86 crore.

Domestic Institutional Investors (DII) seem to be putting up a fight, with a net inflow of Rs. 2,646.65 crore. While DIIs bought shares worth Rs. 13,418.45 crore and sold Rs. 10,771.80 crore.

Bank Nifty

The Nifty Banking sector had some gainers and some losers for the day.

The gainers included IndusInd Bank with a 1.34% increase, ICICI Bank with a 0.23% increase, and AU Bank with a 0.03% increase.

On the other hand, the biggest losers in the sector included IDFC First Bank with a 1.23% decline, Kotak Bank with a 1.21% decline, Canara Bank with a 1.15% decline, State Bank of India with a 0.95% decline, and Federal Bank with a 0.92% decline. These results suggest that most of the banking stocks not performed better for the day.

Gold and Silver Rate (INR) 12th December, 2024

22 K Gold / g	₹ 7,285
24 K Gold / g	₹ 7,947
18 K Gold / g	₹ 5,961

Silver / g	₹ 96.50	+ ₹ 1
Silver / kg	₹ 96,500	+ ₹ 1,000

Rupee Dips to Unprecedented Low: What’s Behind the Slide?

“Rupee Dips to Unprecedented Low: What’s Behind the Slide?”

The Indian Rupee has made a stunning fall to a new all-time low, settling at a record 84.87 against the US dollar, a 4 paise decline. This shocking drop has raised concerns across the market as a confluence of factors led the rupee into uncharted territory.

So, what exactly is behind this sudden slide? It’s a perfect storm: negative domestic equity markets, outflow of foreign funds, and the rising price of crude oil. As investors eagerly await domestic inflation data, the strength of the US dollar continues to exert its pressure on the rupee.

The rupee’s journey today was nothing short of dramatic. It opened at 84.85, quickly slumped to an intraday low of 84.88, before settling at 84.87 by the end of the session. This marks the rupee’s lowest close ever—a level that hasn’t been seen before, even with the previous low of 84.86 recorded just days ago, on December 9.

But the question is, what comes next? Will the rupee continue its downward spiral, or is there a silver lining? The strong US dollar, fueled by rising inflation in the US, keeps the pressure mounting. On top of that, the surge in global crude oil prices could make the rupee’s recovery even more challenging. However, there is still hope for the rupee—intervention by the RBI could stabilize things at lower levels.

As traders await the latest US economic data, including the Producer Price Index (PPI) and unemployment claims, the USD-INR spot price is expected to hover between 84.65 and 85.10. Will the rupee manage to hold its ground, or is it headed further south? Only time will tell.

The dollar index, measuring the greenback’s strength against a basket of currencies, traded slightly lower at 106.22, but will it be enough to give the rupee a break? The pressure is real, and the stakes have never been higher.

Stocks Highlights

Adani Enterprises Ltd. saw a 1.90% increase, closing at Rs 2,504.00 after its previous close of Rs 2,457.25. However, beneath the surface, the company is facing significant challenges.

For the first time in three years, Adani Enterprises has reported a 28.87% decline in sales, a clear sign of revenue contraction. Even more concerning, a bearish signal is in play—the stock saw a 10-day moving average crossover on December 10, 2024, a historically weak sign. In fact, stocks with similar signals have averaged a price decline of -3.18% within the following 7 days over the last 5 years.

While the stock’s 3-year return of 41.19% outpaced the Nifty 100’s return of 43.8%, the company is feeling the squeeze in its operating expenses, spending 4.72% on interest costs and 2.42% on employee expenses in the year ending March 31, 2024. Could these internal pressures signal more turbulent times ahead? The sell signal is growing louder—investors might want to take caution.

NTPC Ltd. faced a significant decline of -2.63%, settling at Rs 355.90 from a previous close of Rs 365.50. Despite the drop, a closer look reveals that this stock is also dealing with a shifting market landscape.

Over the last 20 years, only 0.99% of trading sessions saw an intraday decline of over 5%, but this moment stands out. NTPC’s quarterly revenue dropped by 7.73% QoQ, marking the lowest performance in the last three years. Just like Adani Enterprises, NTPC’s 10-day moving average crossover on December 10 signals a bearish trend, and stocks with this pattern have seen an average price decline of -2.63% within 7 days over the last 5 years.

Still, despite this downturn, NTPC has been a powerhouse with a 189.73% return over the past 3 years, far outpacing the 43.8% return of the Nifty 100.

Advance Decline Ratio

Today, the advance-decline ratio was 0.47 and the market breadth was negative. The volatility index India Vix decreased by 0.58 to settle at 13.19 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 895
Decliners – 1913
52Wk High – 101
52Wk Low – 19
High Band Hitters – 93
Low Band Hitters – 57
200d SMA – 23768
50d SMA – 24433
20d SMA – 24153

Top Gainers and Losers Stocks

The top gainers were Adani Enterprises (+1.90%), Bharti Airtel (+1.51%), IndusInd Bank (+1.34%), Tech Mahindra (+1.21%), and Adani Ports (+0.84%).

The top losers were NTPC (-2.63%), Hindustan Unilever (-2.31%), Coal India (-2.17%), Hero MotoCorp (-2.05%), and BPCL (-1.85%).

Top Gainers and Losers Sectors

The top gainer sectors were IT (+0.77%), and Metal (+0.25%).

The top losers sectors were Media (-2.29%), FMCG (-1.09%), Oil & Gas (-0.91%), Auto (-0.80%), and Consumer Durables (-0.59%).

SECTORS – NOTABLE ACTION
IT +0.77%
METAL +0.25%
MEDIA -2.29%
FMCG -1.09%
OIL & GAS -0.91%

Stocks Ban List

(SEBI) F&O ban list (GRANULES close at +589.30), (HINDCOPPER close at +291.15), (METROPOLIS close at +2226.35), (RBLBANK close at -173.64), (PVRINOX close at +1459.65), and (MANAPPURAM close at +178.75) are not currently on the stock exchange.

A stock enters the Ban List if its MWPL is above 95%. Implying that, Ban List shows the Futures and Options (FnO) stocks whose combined open interest in all FnO contracts for a given period crosses 95% of Market-Wide Position Limit.

PNB, ABFRL, BANDHANBNK, SAIL, and IGL stocks has the possibilities of entrants in the ban list.

PVRINOX, and MANAPPURAM stocks has the possibilities of exit from the ban list.