Is the Market Recovering or Just Taking a Breather? Nifty’s Unexpected Moves Raise Questions for 2025!

NiftyTrader • December 31, 2024

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Index	Price	Change	% Chg
Nifty 50	23,644.80	-0.10	-0.00%
Nifty MidCap 50	15,974.10	-56.25	-0.35%
Nifty SmallCap 50	8,937.20	+66.50	+0.75%
Nifty Bank	50,860.20	-92.55	-0.18%
Nifty Financial	23,512.80	-52.50	-0.22%
BSE SENSEX	78,139.01	–109.12	–0.14%

At the close, the Nifty 50 was at 23,644.80 down by 0.00%

In a dramatic turn of events, the NSE Nifty 50 index opened the day in the red, dropping by a negligible 0.00%. Yet, it managed to close in the red, with the index finishing below the critical level of 23,650. Was this just a blip on the radar, or is something larger at play here?

Key Highlights:

Nifty started in the red and closed lower, ending below 23,650.
A small positive candle appeared on the daily chart, hinting at an unexpected market rebound.
A bullish counter-attack follows what seemed to be a false downside breakout.

The market’s mid-day recovery left traders questioning its true intent. After dipping to a low of 23,460, the Nifty surged 230 points to hit a high of 23,690 before eventually settling at 23,645. But was this a sign of things to come or just a short-lived rally?

The Battle Between Bulls and Bears: Who Will Win?

Despite the day’s marginal losses due to weakness in IT and select banking stocks, the overall sentiment turned cautiously optimistic. The Nifty index failed to break above its key moving averages, leaving technical analysts on edge. However, if Nifty crosses 23,700, the index could race towards 23,900-24,000. But, what happens if it doesn’t? Support lies at 23,550, and a failure to hold here could indicate further trouble.

Key Points to Watch:

Resistance at 23,700 could lead to a rise towards 23,900-24,000.
Support at 23,550 is critical; failure to hold could lead to further weakness.

Nifty’s 200-day EMA is in focus once again. After dipping below this important average on Monday, the index quickly rebounded, refusing to show sustained weakness. Is this early bounce signaling more gains ahead, or just a temporary blip?

Crucial Technical Levels to Watch: A Range-Bound Market Ahead?

The weekly chart shows a small red candle, which sits next to a green candle from the previous week, signaling a broader range movement. With Nifty trapped between 23,500-24,000, the upside bounce from 23,500 could set the stage for a potential move towards 24,000. But, can the bulls maintain this momentum?

What’s Next for Nifty?

23,500-24,000 is expected to be the near-term range.
If Nifty holds above 23,500, a move towards 24,000 could be on the cards.

2024 Ends with Mixed Sentiments: What Does 2025 Hold for Nifty?

As we bid farewell to 2024, India’s Nifty index wrapped up the year with impressive gains. India’s equity market outperformed global peers, with Nifty closing 8.17% up and recording its ninth consecutive year of positive returns. But, global uncertainties, including geopolitical tensions and US tariff concerns, weighed on the market’s performance. Despite these challenges, India’s market remains relatively insulated from global shocks.

Key Takeaways:

Nifty’s performance capped 2024 with solid gains of 8.17%.
However, global uncertainties remain a potential risk factor for 2025.

With weak corporate earnings, slowing economic growth, and tight liquidity in the backdrop, what does this mean for Nifty as we head into 2025?

Is the Market Heading Towards More Volatility in Early 2025?

Expect volatile conditions in the first half of 2025, driven by three key factors:

The new US president’s policies.
Union Budget announcements.
Q3 earnings.

As the market braces for impact, what’s the best strategy? Experts suggest that optimistic earnings commentary could push certain sectors into the spotlight, particularly those benefiting from government spending and rate cuts.

The Big Shift: Small and Mid-Caps Outperform!

In a surprising twist, small and mid-cap stocks dramatically outperformed the benchmarks. The BSE MidCap and BSE SmallCap indices surged by more than 25% each—marking strong momentum and growth potential. Meanwhile, IT and banking stocks saw more modest gains, while pharma and real estate sectors surged ahead.

What’s surprising:

Mid and small-caps clocked impressive gains.
Pharma and real estate led the charge, with gains of 39% and 33%, respectively.

2025: A Year of Strategic Diversification and Caution?

As global markets have already surged by 40% since October 2023, many experts warn that equity valuations might not have much room for further expansion. It’s clear that earning growth will be the key driver for market returns in 2025.

To navigate potential risks, experts suggest diversification and focusing on Alpha generation rather than Beta exposure. This could provide better risk-adjusted returns as global markets stabilize.

Key Trends to Watch in 2025:

Diversification will be crucial for mitigating risk.
Focus on selective value investments across sectors.

As the year draws to a close, Nifty’s recovery from a day’s low signals that the bulls might still be in control. However, with the VIX spiking and global conditions still uncertain, one thing is clear: 2025 could be a year of opportunities and challenges in equal measure. Keep your eyes on the key technical levels and sectoral rotations as we enter the new year!

Stay tuned, as 2025 holds the promise of a rollercoaster ride for investors, where strategic decisions will make all the difference.

Bank Nifty: Down by 0.18%

The market took a cautious step into the new year, as both Bank Nifty and the BSE Sensex opened in the red. Bank Nifty saw a dip of 0.18%, settling at 50,860.20, while the Sensex followed suit with a modest loss of 0.14%, closing at 78,139.01. What does this downward trend signal for the coming days?

In the sectorial front, The Oil & Gas sector surged by a significant 1.06%, buoyed by stellar performances from leading companies. Oil & Natural Gas Corporation Ltd. (ONGC) emerged as the top gainer, climbing an impressive 2.73%, followed closely by Oil India Ltd., which advanced by 2.48%.

On the flip side, the IT sector faced a tough day, recording a decline of 1.44%. Within this struggling sector, Mphasis Ltd. took the hardest hit, slipping by a steep 2.84%, while Persistent Systems Ltd. followed suit with a loss of 2.45%.

Foreign Institutional Investors recorded a buying value of ₹5,950.15 crore and a significantly higher selling value of ₹10,595.37 crore, resulting in a net outflow of ₹4,645.22 crore.

Domestic Institutional Investors stepped in to balance the scales. DIIs reported an impressive buying value of ₹13,550.29 crore against a selling value of ₹9,003.56 crore, translating to a net inflow of ₹4,546.73 crore.

Bank Nifty

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

The gainers included Kotak Bank with a 2.54% increase, State Bank of India with a 0.98% increase, Punjab National Bank with a 0.87% increase, and Canara Bank with a 0.62% increase.

On the other hand, the biggest losers in the sector included AU Bank with a 3.15% decline, IDFC First Bank with a 0.99% decline, ICICI Bank with a 0.86% decline, Federal Bank with a 0.42% decline, and HDFC Bank with a 0.33% decline. These results suggest that some of the banking stocks not performed better for the day.

Gold and Silver Rate (INR) 31th December, 2024

22 K Gold / g	₹ 7,110	– ₹40
24 K Gold / g	₹ 7,756	– ₹44
18 K Gold / g	₹ 5,818	– ₹32

Silver / g	₹ 90.50	– ₹2
Silver / kg	₹ 90,500	– ₹2,000

Will the Indian Rupee Face Turbulence in 2025? Analyzing the Challenges Ahead

The Indian Rupee (INR) is gearing up for a bumpy ride in 2025, as economic and geopolitical forces set the stage for potential pressure. Let’s unravel the factors shaping the rupee’s journey and what lies ahead.

Is a Strong Dollar Unstoppable?

Experts suggest that the US Federal Reserve’s hawkish policies and new US government directives could strengthen the dollar in 2025. This places the rupee under significant strain.

Federal Reserve’s Rate Trajectory: Fewer-than-expected rate cuts could keep the dollar strong.
Will the Fed’s moves amplify the rupee’s woes?
Geopolitical Tensions: Escalating global conflicts and economic uncertainties add to the rupee’s challenges.
Can India navigate this storm?
Union Budget 2025: February’s budget could be a pivotal moment. Policies aimed at economic recovery may dictate the rupee’s short-term trajectory.
Will the budget soothe investor concerns?

Volatility Hits Record Highs: Is the Rupee on a Slippery Slope?

In recent weeks, the rupee’s volatility has reached unprecedented levels. Key factors driving this trend include:

Foreign Outflows: Equity markets have witnessed a surge in foreign portfolio investor (FPI) outflows, adding pressure.
- Trade Deficit Worries: India’s widened merchandise trade deficit exacerbates the issue.
- Economic Growth Concerns: Sluggish growth casts doubts on the rupee’s stability.

The rupee’s decline from ₹84.0837 on October 30 to a record low of ₹85.6200 on December 31 underlines this fragile situation.
Can the RBI’s efforts prevent further decline?

Key Points:

Rupee hits record lows amidst heightened volatility.
Economic headwinds persist, including trade deficits and slower growth.

RBI: The Guardian of Stability?

The Reserve Bank of India (RBI) remains at the forefront of managing the rupee’s stability. But its options are limited:

Heavy Interventions: The RBI has been selling dollars aggressively in both spot and forward markets to curb volatility.
Will these interventions prove sustainable?
Forex Reserves Depletion: A noticeable drop in foreign exchange reserves highlights the toll of interventions.
How long can the RBI shield the rupee?

Experts suggest that if other Asian currencies continue to slide, the RBI may allow the rupee to depreciate with shallow intervention, reflecting a more flexible approach.

Will 2025 Be a Year of Turbulence for the Rupee?

The odds seem stacked against the rupee:

Strong Dollar: The likelihood of a stronger dollar suggests continued downward pressure.
External and Domestic Challenges: Geopolitical tensions, the Union Budget, and India’s economic performance will all play critical roles.
Increased Volatility: Record lows and heightened fluctuations may become the norm.

Investors, businesses, and policymakers must brace for a year of challenges and strategic adjustments. Will the Indian Rupee weather the storm or sink under pressure? Stay tuned for updates and expert insights.

Stocks Highlights

Bharat Electronics Ltd. (BEL) stock price surged by 2.84%, climbing from its previous close of ₹284.90 to a last-traded price of ₹293.00. But is this just the beginning?

Stock Returns vs. Nifty 100: BEL delivered a 307.1% return over 3 years, outperforming Nifty 100’s 41.16%.
Will BEL continue its winning streak?

Intraday Insights: In the past 20 years, only 1.74% of trading sessions recorded intraday declines exceeding 5%.
A rare and stable trend – could this be your safe bet?

Debt-Free for 5 Years: BEL boasts zero debt, a testament to its financial prudence.
Can a debt-free status shield the company in volatile times?

Operating Expenses:

Interest Expenses: Less than 1% of operating revenue.

Employee Costs: Account for 12.28% of operating revenue (FY 2024).
Efficient management or cost-cutting at its best?

Adani Enterprises Ltd. saw its share price dip by -2.41%, sliding from ₹2,592.35 to ₹2,530.00. Should this drop worry you, or is it a buying opportunity?

Stock Returns vs. Nifty 100: Adani Enterprises delivered a 51.65% return over 3 years, outpacing Nifty 100’s 41.16%, but far behind BEL’s 307.1%.
Is Adani losing its edge in the race?

Intraday Action: Over the last 20 years, only 4.67% of sessions saw intraday gains exceeding 5%.
An unusual movement – what’s next for Adani?

Revenue Contraction: Sales plunged by 28.87%, marking the first revenue decline in 3 years.
Is this the beginning of a downward spiral or a temporary setback?

Technical Signals: A 20-day moving crossover flashed a bullish signal yesterday. Historically, this has led to an average price gain of 5.45% within 7 days.
Will the bulls rally again?

Advance Decline Ratio

Today, the advance-decline ratio was 1.57 and the market breadth was positive. The volatility index India Vix increased by 3.39 to settle at 14.45 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 1710
Decliners – 1091
52Wk High – 34
52Wk Low – 90
High Band Hitters – 75
Low Band Hitters – 85
200d SMA – 23873
50d SMA – 24175
20d SMA – 24229

Top Gainers and Losers Stocks

The top gainers were BEL (+2.84%), ONGC (+2.73%), Kotak Bank (+2.54%), Trent (+2.22%), and Coal India (+1.72%).

The top losers were Adani Enterprises (-2.41%), Tech Mahindra (-2.06%), TCS (-1.27%), Infosys (-1.07%), and SBI Life (-0.92%).

Top Gainers and Losers Sectors

The top gainers sector were Oil & Gas (+1.06%), Pharma (+0.74%), Metal (+0.47%), Consumer Durables (+0.41%), and FMCG (+0.32%).

The top losers sectors were IT (-1.44%), Realty (-0.24%), Financial Services (-0.22%), and Media (-0.07%).

SECTORS – NOTABLE ACTION
OIL & GAS +1.06%
PHARMA +0.74%
METAL +0.47%
IT -1.44%
REALTY -0.24%
FINANCIAL SERVICES -0.22%

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.