Is the Market on the Brink? Nifty 50 Bears Tighten Grip as Fed Fears and Global Pressures Mount !

NiftyTrader • December 17, 2024

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Index	Price	Change	% Chg
Nifty 50	24,336.00	-332.25	-1.35%
Nifty MidCap 50	16,490.05	-82.85	-0.50%
Nifty SmallCap 50	9,299.60	-78.90	-0.84%
Nifty Bank	52,834.80	-746.55	-1.39%
Nifty Financial	24,498.90	-358.10	-1.44%
BSE SENSEX	80,684.45	–1064.12	–1.30%

At the close, the Nifty 50 was at 24,336.00 down by 1.35%

On December 17, the Nifty 50 index saw a significant drop, closing 1.35% lower at 24,336. This marked the second consecutive day of losses, with the index under pressure throughout the trading session. The market opened in the red and continued to slide as investors opted for profit booking, wary of upcoming global cues and the US Federal Reserve’s interest rate decision on December 18. The sell-off was widespread, with nearly all sectors registering losses, especially metal, auto, oil & gas, and financials.

Nifty 50 closed at 24,336, down by 1.35%.
Profit booking and sector-wide sell-offs dominated the session.
US Fed’s upcoming decision caused market caution and volatility.
Metal, auto, and financials were among the worst performers.

Profit Booking Dominates as Investors Stay Cautious

The Nifty 50 was weighed down by profit booking amid cautious sentiment ahead of the US Federal Reserve meeting. The index dropped 332 points, with significant losses in PSU Bank, which fell by 1.89%, and the Metal sector. Despite brief recoveries, the market sentiment remained negative, as the Nifty fell below 24,500 and approached 24,300.

PSU Bank dropped 1.89%.
Metal stocks faced significant declines.
Nifty 50 fell below 24,500, nearing 24,300.
Profit booking overshadowed any attempts at recovery during the session.

Technical Indicators Signal Further Weakness

The technical outlook for Nifty 50 remains weak, with the formation of a long bearish candlestick on the daily charts. This indicates a lack of strength to sustain any upward move. The index also fell below its 21-EMA, a key short-term moving average, signaling increasing bearish sentiment. The Nifty might find support near 24,200, but a break below this level could lead to further selling.

A long bearish candlestick suggests a lack of bullish momentum.
The Nifty fell below key short-term moving averages.
Support is expected near 24,200; a break below could trigger further losses.
Bearish sentiment continues to dominate the market.

Rupee Hits Record Low, Adding Pressure

The Indian rupee hit a record low of 84.8950 against the US dollar on December 17, weighed down by foreign fund outflows and weak domestic equities. This drop came after a record-high trade deficit for November, largely due to increased gold imports. The persistent weakness of the rupee adds to investor uncertainty and further pressures the market.

Indian rupee hit a record low of 84.8950.
The trade deficit reached a record high of $37.84 billion.
Gold imports were a significant contributor to the widening deficit.
The rupee’s weakness exacerbated market pressure.

US Fed Jitters and Lack of FII Buying Dampens Sentiment

Investor sentiment was further subdued as the US Federal Reserve is expected to announce a 25 basis points rate cut on December 18. However, markets are also watching closely for any hawkish signals from Fed Chair Jerome Powell. Meanwhile, Foreign Institutional Investors (FIIs) continued their selling spree, offloading equities worth Rs 279 crore, contributing to the overall cautious mood in the market. This continued FII selling dampened market sentiment, especially amid concerns about global economic conditions.

US Fed expected to cut rates by 25 basis points.
Investors are awaiting any hawkish commentary from the Fed.
FIIs sold equities worth Rs 279 crore, exacerbating market caution.
Global economic conditions remain uncertain, adding to investor caution.

Global Markets React to US Fed and Other Central Banks

Global markets are also experiencing uncertainty as key central banks, including the Bank of Japan (BoJ), are set to meet on December 18-19. The BoJ is expected to maintain its policy rate at 0.25%, but its decision could be influenced by the Fed’s outcome. This, combined with rising US bond yields and a stronger dollar, has put additional pressure on global equities, contributing to the pessimism in domestic markets. In Asia, major markets like Seoul, Shanghai, and Hong Kong traded lower, while Tokyo saw modest gains.

Bank of Japan’s decision could impact global sentiment.
US Fed decision expected to influence global markets.
Rising US bond yields and a stronger dollar adding to market pressures.
Asian markets showed mixed results, with Seoul, Shanghai, and Hong Kong declining.

Impact of Trade Deficit and Global Cues

The record-high trade deficit continues to put pressure on the Indian markets, alongside FIIs selling and a weak rupee. Investors are worried about capital outflows due to concerns over the trade deficit and rising US bond yields. Global markets are keeping an eye on policy decisions from the US Fed, BoJ, and BoE, which will set the tone for market direction. Any deviation from expected outcomes could trigger volatility in both domestic and global markets.

The trade deficit and FII outflows are weighing heavily on market sentiment.
Investors are closely watching central bank decisions for further clues.
Global trade and economic conditions continue to affect domestic markets.
Any unexpected signals from central banks could lead to increased market volatility.

Outlook: Is There a Path to Recovery?

The outlook for Nifty 50 remains bearish in the short term, with support expected near 24,200. However, any break below this level could signal deeper losses. The market is likely to remain volatile as investors await the US Fed’s decision, and other central banks’ policy moves. The rupee weakness and trade deficit are likely to continue exerting pressure on the market in the near future.

Short-term outlook remains bearish for the Nifty 50.
Support at 24,200 could help halt the decline, but risks remain.
The rupee’s weakness and trade deficit will continue to impact sentiment.
Global economic factors and central bank policies will drive market volatility.

Key Takeaways:

The outlook remains cautious, with a potential decline to 24,200.
Nifty 50 closed sharply lower, down by 1.35% at 24,336.
Profit booking dominated the market, with sector-wide losses.
The rupee hit a record low amid concerns over trade deficit.
US Fed and BoJ decisions will continue to influence market sentiment.

Bank Nifty: Down by 1.39%

The Bank Nifty index opened in the red and continued to slide throughout the session, closing 1.39% lower at 52,834.80. This marked a challenging day for the banking sector, reflecting broader market concerns. Similarly, the BSE Sensex also experienced a significant downturn, falling 1.30% to close at 80,684.45, its lowest level in recent trading sessions. Both indices were under pressure due to profit booking, global uncertainties, and concerns over domestic economic conditions.

In the sectorial front, The media sector is on the rise, albeit with modest gains. The sector gained by 0.02%, showing that even in a volatile market, some companies are finding their footing. Among the key players, Den Networks Ltd. stood out, posting a strong increase of 2.06%. Meanwhile, PVR INOX Ltd. followed closely with a gain of 0.99%.

On the other hand, the metal sector is facing some serious challenges. Metal stocks lost by 1.63% overall, sending shockwaves through the market. Within this sector, Hindustan Copper Ltd. suffered a massive blow, dropping by -3.06%, while Jindal Steel & Power Ltd. wasn’t far behind, with a loss of -2.78%.

Foreign Institutional Investors (FII) continued their selling spree, with a Net Sell Value of Rs. 6,409.86 crore. The total Buy Value stood at Rs. 15,558.53 crore, while their Sale Value reached Rs. 21,968.39 crore.

Domestic Institutional Investors (DII) showcased a contrasting approach. They had a Net Buy Value of Rs. 2,706.48 crore, with a Buy Value of Rs. 11,996.54 crore and Sale Value of Rs. 9,290.06 crore.

Bank Nifty

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

It seems that none of the stocks in the Nifty Bank index are trading in the green today. This could indicate overall bearish sentiment in the banking sector.

On the other hand, the biggest losers in the sector included AU Bank with a 2.62% decline, IndusInd Bank with a 2.49% decline, Punjab National Bank with a 2.16% decline, Canara Bank with a 2.11% decline, and HDFC Bank with a 1.89% decline. These results suggest that all of the banking stocks not performed better for the day.

Gold and Silver Rate (INR) 17th December, 2024

22 K Gold / g	₹ 7,150	+ ₹ 10
24 K Gold / g	₹ 7,800	+ ₹ 11
18 K Gold / g	₹ 5,850	+ ₹ 8

Silver / g	₹ 92.50
Silver / kg	₹ 92,500

Stocks Highlights

Cipla Ltd: A Quiet But Steady Surge

In a positive turn, Cipla Ltd.’s share price has risen by 0.14%, closing at Rs 1,450.55 from the previous day’s price of Rs 1,448.45. The stock is maintaining a resilient position in the market, but what’s driving this quiet ascent?

Key Highlights:

ROE (Return on Equity): Cipla Ltd. delivered a 15.43% ROE for the year ending March 31, 2024, outshining its 5-year average of 11.98%. This impressive performance signals strong profitability and efficient management.
Revenue Growth: The company’s annual revenue grew by 14.17%, beating its 3-year CAGR of 10.82%, showing robust expansion.
Stock Performance vs. Nifty Pharma: Cipla has outperformed the Nifty Pharma index, generating 68.39% returns over the past three years, compared to the index’s 65.43%.
Intraday Performance: Over the past 20 years, only 0.85% of trading sessions saw intraday gains exceeding 5%, highlighting the stock’s relatively stable movement.

Shriram Finance Ltd: Bearish Signals Emerge

On the other hand, Shriram Finance Ltd. is facing some alarming drops, with its share price sliding by -5.27% to a last traded price of Rs 2,972.00, down from the previous close of Rs 3,137.45. This sharp decline is raising questions about the company’s future performance.

Key Highlights:

Intraday Decline: In the last 20 years, only 2.24% of trading sessions saw intraday declines greater than 5%, signaling an unusual drop.
Bearish Trend: A 10-day moving average crossover appeared yesterday, a bearish signal. Over the last 5 years, stocks with this pattern have seen an average decline of -3.22% within 7 days.
Stock Performance vs. Nifty Financial Services: Despite the recent drop, Shriram Finance has outperformed the Nifty Financial Services index, delivering an impressive 146.33% return over 3 years, compared to the index’s 40.46% return.
Expense Insights: The company spent 42.67% of its operating revenue on interest expenses and 9.54% on employee costs in the year ending March 31, 2024, suggesting high operating costs that may be contributing to the recent price dip.

Advance Decline Ratio

Today, the advance-decline ratio was 0.49 and the market breadth was negative. The volatility index India Vix increased by 3.31 to settle at 14.49 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 908
Decliners – 1872
52Wk High – 122
52Wk Low – 17
High Band Hitters – 123
Low Band Hitters – 61
200d SMA – 23804
50d SMA – 24387
20d SMA – 24315

Top Gainers and Losers Stocks

The top gainers were Cipla (+0.14%), ITC (+0.13%).

The top losers were Shriram Finance (-5.27%), Grasim (-3.21%), Hero MotoCorp (-3.01%), Bharti Airtel (-2.80%), and JSW Steel (-2.76%).

Top Gainers and Losers Sectors

The top gainer sectors were Media (+0.02%).

The top losers sectors were Metal (-1.63%), Oil & Gas (-1.61%), Auto (-1.57%), Financial Services (-1.44%), and Consumer Durables (-1.12%).

SECTORS – NOTABLE ACTION
MEDIA +0.02%
METAL -1.63%
OIL & GAS -1.61%
AUTO -1.57%

Stocks Ban List

(SEBI) F&O ban list (GRANULES close at +589.75), (MANAPPURAM close at -181.44), (HINDCOPPER close at -284.50), (SAIL close at -121.11), (NATIONALUM close at +226.63), and (RBLBANK close at -167.05) 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.

BANDHANBNK, PNB, ABFRL, DIXON, IGL, AARTIIND, NMDC, and BIOCON stocks has the possibilities of entrants in the ban list.

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