Is the Indian Market Set for a Stunning Turnaround in 2025? Here’s What You Missed on the First Day!

NiftyTrader • January 1, 2025

Post Views: 564

Index	Price	Change	% Chg
Nifty 50	23,742.90	+98.10	+0.41%
Nifty MidCap 50	16,051.95	+77.85	+0.49%
Nifty SmallCap 50	9,008.30	+71.10	+0.80%
Nifty Bank	51,060.60	+200.40	+0.39%
Nifty Financial	23,619.95	+107.15	+0.46%
BSE SENSEX	78,507.41	+368.40	+0.47%

At the close, the Nifty 50 was at 23,742.90 up by 0.41%

A New Year, A New Beginning: Market’s First Day Surprise!

The Indian stock market began 2025 on a high note, with Nifty 50 rising 0.41% to settle at 23,742.90 on its first trading day. The market showed resilience, recovering from early losses and pushing into the green by the end of the session. Financial services stocks, particularly in the auto and banking sectors, were pivotal in lifting the index. Nifty closed above 23,700, with strong gains in auto stocks like Maruti Suzuki, which reported impressive December sales.

Key Points:

Nifty closed at 23,742.90, up 0.41% or 98.10 points.
Auto stocks and banking sectors led the charge.
Broad-based sectoral recovery boosted overall market sentiment.

What’s Ahead? The Outlook for Q1 2025 and Beyond

Despite the market’s strong start, experts emphasize that sustaining this momentum will hinge on Q3 earnings growth, with expectations of positive growth quarter-on-quarter. The core sector data and an expected increase in government capex spending are likely to provide additional support, particularly in sectors like capital goods, industrials, auto, and power.

However, the real estate sector saw the most significant correction, reflecting the mixed performance across different sectors. Nifty’s resilience will also be tested in the coming days, with the resistance zone between 23,850-23,900 marking key levels to watch.

Key Takeaways:

Expectations of positive earnings growth will influence market stability.
Government capex plans could fuel sectors like auto and capital goods.
Realty sector is facing a downward trend, contrasting with the overall optimism.

December GST Collections Up 7.3%—What Does This Mean for India’s Economic Health?

In a strong indicator of economic recovery, India’s GST collections for December surged by 7.3% YoY, reaching Rs 1.77 lakh crore, surpassing the previous year’s collections. Despite this growth, GST revenues were lower than the record high in April 2024, signaling that the pace of growth is slowing. However, quarterly growth was still better than the previous quarter, with GST revenues averaging Rs 1.82 lakh crore in the October-December period.

Key Points:

GST collections rose by 7.3% YoY to Rs 1.77 lakh crore.
Domestic transactions saw 8.4% growth.
Slower growth pace but better than previous quarter.

What Does This Tell Us? This uptick in collections reflects a healthier economy, especially as India continues its economic recovery post-pandemic. With GST revenue staying consistently high, this could point toward increased consumption and stable economic conditions for the upcoming fiscal year.

Sensex Soars 600 Points—What’s Behind the Market Surge?

In the first trading session of 2025, Sensex jumped a massive 600 points, fueled by strong December auto sales and optimism surrounding the Union Budget. With Maruti Suzuki leading the gains and reporting a 30% YoY increase in sales, auto stocks played a crucial role in the surge. Additionally, the market received a boost from banking stocks and expectations for a growth-oriented Union Budget.

Key Points:

Sensex surged 600 points amid strong auto sales and banking recovery.
Optimism for the Union Budget boosted investor sentiment.
December auto sales saw impressive growth with Maruti Suzuki and Mahindra & Mahindra leading the way.

Illegal Investment Advisor Ordered to Refund Rs 74 Lakh—A Warning for Unregistered Advisors

In a major crackdown, SEBI has ordered an illegal investment advisor to refund Rs 74.28 lakh after they misrepresented their earnings and engaged in unregistered advisory activities. This incident serves as a stark reminder for investors to only deal with SEBI-registered advisors to avoid such fraudulent schemes.

Key Points:

SEBI orders Rs 74.28 lakh refund from an illegal advisor.
Advisor falsely claimed earnings from mother’s catering business.
Regulatory crackdown continues to protect investors.

FII Activity Slows as SEBI Tightens Regulations

The volumes in equity F&O segment hit a 16-month low, with a significant 36.56% decrease from November 2024. Experts attribute this to stricter regulations aimed at curbing speculative trading. The fall in derivatives volumes highlights the effectiveness of SEBI’s measures in addressing market froth and reducing retail losses.

Key Points:

F&O volumes fell by 36.56% in December 2024.
SEBI’s tightening measures have impacted speculative trading.
Cash market turnover saw a 4.4% increase.

What’s Next? With volatile FII flows expected to stabilize in the latter half of FY25, the market could see stabilization as corporate earnings improve and geopolitical tensions ease.

Energy Crisis Deepens as Russia Halts Gas Transit to Europe

A significant geopolitical event unfolded as Russia ceased gas exports to Europe via Ukraine, marking the end of 50 years of transit. This move adds further pressure on energy supplies in Europe, especially as the region depletes winter storage at an alarming rate. The cutoff is expected to raise gas prices and worsen the energy crisis in central Europe.

Key Points:

Russia halts gas exports to Europe after 50 years of transit.
European countries must seek alternative, costlier sources.
Energy prices have surged 50% year-on-year amid the crisis.

What’s Next? This action will likely exacerbate the energy crisis in Europe, leading to higher gas prices and further geopolitical instability.

Bank Nifty: Up by 0.39%

The Indian equity markets began 2025 with positive movement, as both the Bank Nifty and the BSE Sensex ended their first trading day in the green, reflecting investor confidence and optimism for the year ahead. The Bank Nifty, which opened in the red, showed resilience, rising by 0.39% to close at 51,060.60, underpinned by gains in major banking stocks. Meanwhile, the BSE Sensex also saw a positive session, gaining 0.47%, and closing at an impressive 78,507.41 points, marking a strong start to the new year.

Bank Nifty rose by 0.39%, closing at 51,060.60.
BSE Sensex increased by 0.47%, ending the day at 78,507.41.

In the sectorial front, the Auto sector has gained a solid 1.34%, and it’s not stopping there! Maruti Suzuki India Ltd. has revved up with a staggering 3.01% gain, leaving analysts in awe. Similarly, Mahindra & Mahindra Ltd. has roared ahead with a 2.36% increase. 🚗💥 But what’s driving this sudden surge? Analysts attribute it to strong consumer demand and exciting new model launches, suggesting that the road ahead might be smoother for these automakers.

Meanwhile, the Real Estate sector is struggling. Losing 1.11%, this sector has come out as the biggest loser today. The Phoenix Mills Ltd. has taken the biggest hit, dropping 2.55%, while Prestige Estates Projects Ltd. isn’t far behind with a 2.28% loss. What’s causing this downturn? Experts suggest that rising interest rates and sluggish demand for property are weighing heavily on these companies.

FIIs were net sellers on the first trading day of the year, with a significant net outflow of ₹1,782.71 crore. The FII buy value stood at ₹1,237.02 crore, while their sales amounted to ₹3,019.73 crore.

DIIs exhibited a more optimistic outlook, posting a net inflow of ₹1,690.37 crore. With a buy value of ₹8,536.97 crore and a sale value of ₹6,846.60 crore.

Bank Nifty

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

The gainers included AU Bank with a 1.95% increase, IDFC First Bank with a 1.76% increase, IndusInd Bank with a 1.07% increase, Axis Bank with a 0.71% increase, and HDFC Bank with a 0.68% increase.

On the other hand, the biggest losers in the sector included State Bank of India with a 0.08% decline, Punjab National Bank with a 0.03% decline. These results suggest that most of the banking stocks performed better for the day.

Gold and Silver Rate (INR) 1st January, 2025

22 K Gold / g	₹ 7,150	+ ₹40
24 K Gold / g	₹ 7,800	+ ₹44
18 K Gold / g	₹ 5,850	+ ₹32

Silver / g	₹ 90.50
Silver / kg	₹ 90,500

Rupee Hits Record Lows for Seventh Straight Session—What’s Driving This Depreciation?

The Rupee’s Struggle: Seventh Consecutive Session of Decline

The Indian rupee has hit a new record closing low for the seventh consecutive session, continuing its downward spiral against the U.S. dollar. On Wednesday, the rupee closed at 85.6450 against the dollar, slightly weaker than the previous session’s close of 85.6150. This ongoing trend highlights a growing depreciation bias for the local currency, and traders are left wondering if this downward pressure will persist.

Key Takeaway: The rupee is facing consistent pressure, largely driven by dollar demand from importers, which has pushed the currency lower. With global markets muted due to the New Year holiday, the focus remains on domestic economic factors.

A Lackluster Start to 2025—But the Dollar’s Strength Keeps Rising

The first trading session of 2025 was relatively lackluster, with global cues remaining muted and many markets closed for the New Year holiday. Despite the quiet start, analysts remain concerned about the rupee’s outlook in the short term.

Why is this Happening? The dollar’s strength continues to dominate, with the dollar index touching a two-year high of 108.58 earlier this week. This surge is fueled by expectations of higher interest rates from the U.S. Federal Reserve, compounded by the prospect of policy changes under the incoming U.S. President, Donald Trump.

Key Takeaway: The rupee is likely to remain under pressure due to a stronger dollar, slowing domestic growth, and a widening trade deficit.

Rupee Outlook: What’s Next?

Looking ahead, traders are predicting that the rupee will trade within a range of 85.20 to 85.80 in the near term. However, there’s little relief in sight as domestic factors, including the merchandise trade deficit and economic growth slowdown, continue to weigh on the currency.

The rupee’s all-time low of 85.8075 reached on December 27, 2024, marks a low point that traders fear could trigger further declines in 2025.

Key Takeaway: The rupee’s depreciation is expected to continue in the coming months, driven by global dollar strength and domestic economic challenges.

Key Points to Watch:

The rupee’s depreciation continues, now at a record seven-day losing streak.
Dollar demand from importers and global market conditions are pushing the currency down.
The stronger dollar driven by U.S. economic policies and interest rate expectations is a key factor.
Domestic challenges such as slowing growth and a widening trade deficit are adding pressure on the rupee.

Stocks Highlights

The stock of Maruti Suzuki India Ltd. is on the rise, gaining 3.01% from its previous close of Rs 10,858.40, with the last traded price now at Rs 11,185.00. But what’s really driving this rise? Let’s dig deeper.

Key Fact: Despite this intraday surge, only 1.57% of trading sessions over the last 20 years have seen intraday gains higher than 5%. So, while the jump is impressive, it’s far from an everyday occurrence.

ROE Performance: The company is outperforming its 5-year average, with a Return on Equity (ROE) of 15.75% for the fiscal year ending March 31, 2024, compared to its 5-year average of 11.7%. This is a solid indicator that Maruti is doing well in generating profits relative to its equity—great news for investors.

Sell Signal Alert: However, there’s a bearish signal on the horizon. A 5-day moving average crossover appeared on December 30, 2024, and in the past 5 years, stocks showing this pattern have declined by -2.24% within 7 days. Could the tide be turning for Maruti?

Expense Breakdown: Maruti’s interest expenses remain quite low, less than 1% of operating revenues, while employee costs account for 4.44%. This suggests the company is effectively managing its operational expenditures.

On the other hand, Hindalco Industries Ltd. is facing some headwinds. The stock dropped by -1.40%, from a previous close of Rs 602.45 to Rs 594.00. What’s behind this downturn?

Intraday Fact: Similar to Maruti, only 2.46% of trading sessions in the last 20 years have shown intraday gains higher than 5% for Hindalco. So, major intraday swings are rare for this stock as well.

Topline Contraction: Hindalco experienced a sales contraction of -3.12%, marking the first decline in revenue in the past 3 years. This could be a red flag for investors, signaling that the company might be facing industry-specific challenges or a slow market period.

Stock Returns vs. Nifty 100: Hindalco’s 3-year return of 26.68% lags behind the Nifty 100’s 39.06% return. This underperformance relative to the broader market might concern some investors looking for stronger returns.

Expense Breakdown: Hindalco has spent 1.79% of its revenues on interest expenses, and 6.84% on employee costs for the year ending March 31, 2024. This is slightly higher than Maruti’s, suggesting Hindalco has a higher burden in these areas.

Advance Decline Ratio

Today, the advance-decline ratio was 2.70 and the market breadth was positive. The volatility index India Vix increased by 0.41 to settle at 14.51 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 2042
Decliners – 755
52Wk High – 46
52Wk Low – 34
High Band Hitters – 162
Low Band Hitters – 42
200d SMA – 23880
50d SMA – 24153
20d SMA – 24193

Top Gainers and Losers Stocks

The top gainers were Maruti (+3.01%), M&M (+2.36%), LT (+1.73%), Bajaj Finance (+1.71%), and Tata Motors (+1.31%).

The top losers were Hindalco (-1.40%), Dr. Reddy (-1.12%), Adani Ports (-1.04%), ONGC (-0.98%), and Tata Steel (-0.85%).

Top Gainers and Losers Sectors

The top gainers sector were Auto (+1.34%), Media (+0.81%), Consumer Durables (+0.77%), Financial Services (+0.46%), and FMCG (+0.38%).

The top losers sectors were Realty (-1.11%), and Metal (-0.12%).

SECTORS – NOTABLE ACTION
AUTO +1.34%
MEDIA +0.81%
CONSUMER DURABLES +0.77%
REALTY -1.11%
METAL -0.12%

Stocks Ban List

The SEBI F&O ban list does not include any stocks today.

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.

MANAPPURAM, HINDCOPPER, and RBLBANK stocks has the possibilities of entrants in the ban list.