Nifty rebounds sharply, ending a 5-day losing streak. Is this the start of a sustained recovery or a brief relief rally?

NiftyTrader • December 23, 2024

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Index	Price	Change	% Chg
Nifty 50	23,753.45	+165.95	+0.70%
Nifty MidCap 50	15,955.25	+74.15	+0.47%
Nifty SmallCap 50	8,893.75	-32.10	-0.36%
Nifty Bank	51,317.60	+558.40	+1.10%
Nifty Financial	23,785.55	+193.85	+0.82%
BSE SENSEX	78,540.17	+498.58	+0.64%

At the close, the Nifty 50 was at 23,753.45 up by 0.70%

On December 23, the Nifty 50 index made a strong comeback, rising by 1.70%, closing above 23,750. This marked the end of a five-day losing streak. The rally was supported by a Bullish Harami Cross pattern formed on the daily chart, which typically signals a potential rise in market optimism. Additionally, the index closed above the crucial 200-EMA, a key technical indicator suggesting further positive momentum.

Key Points:

Nifty gained 1.70%, closing above 23,750, marking the end of a five-day decline.
The Bullish Harami Cross pattern indicates rising market optimism.
The index closed above the 200-EMA, strengthening the bullish outlook.
Resistance levels are placed around 23,850-24,400, with support at 23,540.

The recent market optimism came after a period of heavy selling, with investor sentiment bolstered by global cues, particularly the lower-than-expected US PCE data. This data raised hopes for further easing of US interest rates, which benefited interest-rate-sensitive sectors like metals. Metals saw significant gains, particularly with the anticipation of higher steel import taxes. However, while the rally was encouraging, the short-term outlook remains somewhat sideways, as the festive season and lack of new catalysts could limit further gains.

Global Markets Overview:

Global markets also saw positive movements on the back of favorable economic data. Asian markets surged, with Tokyo’s Nikkei 225 rising by 1.2%, Hong Kong’s Hang Seng increasing by 0.8%, and Taiwan’s Taiex jumping by 2.6%. In contrast, European markets faced slight declines, with Germany’s DAX down 0.3%, and France’s CAC 40 shedding 0.3%. Oil prices also saw a modest rise, with Brent crude moving up by 0.5%, reaching $73.31 per barrel.

Sector Highlights:

Realty, PSU Banks, and Metals were the standout performers, with metal stocks benefiting from the steel import tax anticipation.
On the downside, Media and Auto sectors lagged behind.
The broader market saw a mixed trend, with Midcaps gaining slightly, while Small Caps faced declines. Despite the overall mixed trend, both Midcaps and Small Caps showed resilience over the past few months.

Foreign and Domestic Institutional Activity:

On the institutional front, Foreign Institutional Investors (FIIs) were net sellers, offloading equities worth Rs 3,597.82 crore on December 20, while Domestic Institutional Investors (DIIs) helped offset the selling pressure, purchasing equities worth Rs 1,374.37 crore.

Union Budget Announcement:

Looking ahead, February 1, 2025, will be a special trading day for Indian markets as the Union Budget 2025 will be presented. Both NSE and BSE will have full trading sessions to coincide with the budget announcement, which is expected to outline key fiscal policies for the upcoming year. This could trigger market reactions depending on the budgetary measures related to economic growth, government spending, and taxation.

GST Hike Impact on India’s Used Car Market:

The recent GST hike on used cars from 12% to 18% is expected to have a significant impact on India’s pre-owned car market, which is valued at $32 billion. This move is expected to slow down business-to-business transactions, though consumer-to-consumer sales remain unaffected. The pre-owned car market is projected to grow to $73 billion by FY28, but this tax increase could hinder growth, especially in a market where affordability plays a key role.

Currency and Bond Markets:

In the currency and bond markets, Indian bond yields opened slightly higher, with the 10-year benchmark yield at 6.795%, while the rupee remained stable at 85.00 per dollar. Despite the recent pressures on the rupee, including concerns over India’s economic growth and outflows from equities, the bond market has been supported by higher demand from foreign investors and insurance companies.

Conclusion and Outlook:

While the market showed strong momentum on December 23, with a rebound in heavyweight stocks like HDFC Bank, Reliance, and ICICI Bank, short-term challenges remain. The lack of fresh catalysts and the impact of the holiday season might keep the market in a sideways range for now. A decisive move above 23,850 could potentially trigger a rally toward the 24,000-24,400 range, but a drop below 23,540 could signal a return to weakness.

Bank Nifty: Up by 1.10%

The Bank Nifty index showed a strong performance on the day, opening in the green and rising by 1.10%. It ended the session on a positive note, closing at 51,317.60. This reflects the overall strength in the banking sector, which contributed significantly to the broader market rally. Similarly, the BSE Sensex also experienced an uplift, gaining 0.64% to close at a high of 78,540.17.

In the sectorial front, the real estate sector, soaring to new heights with a robust 1.47% gain. Leading the charge was The Phoenix Mills Ltd., which dazzled with an impressive 4.28% rise, closely followed by Macrotech Developers Ltd., climbing by 3.07%.

On the flip side, the media sector faced the brunt of the day, ending as the top loser with a 0.39% dip. Within this space, Saregama India Ltd. bore the biggest loss, plunging by a steep 4.56%, while Dish TV India Ltd. slid by 2.85%.

Foreign Institutional Investors (FII) registered a net outflow of Rs 168.71 crore for the day, with a buy value of Rs 8,705.49 crore and a sale value of Rs 8,874.20 crore. This indicates some caution from foreign investors, as they sold more equities than they purchased.

Domestic Institutional Investors (DIIs) displayed a more positive sentiment, with a net inflow of Rs 2,227.68 crore. Their buy value stood at Rs 11,083.76 crore, while the sale value was Rs 8,856.08 crore.

Bank Nifty

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

The gainers included Bank of Baroda with a 2.46% increase, AU Bank with a 1.90% increase, HDFC Bank with a 1.72% increase, Canara Bank with a 1.57% increase, and IndusInd Bank with a 1.51% increase.

On the other hand, the biggest losers in the sector included Kotak Bank with a 0.09% decline. These results suggest that most of the banking stocks performed better for the day.

Gold and Silver Rate (INR) 23th December, 2024

22 K Gold / g	₹ 7,100
24 K Gold / g	₹ 7,745
18 K Gold / g	₹ 5,809

Silver / g	₹ 91.40	– ₹ 0.10
Silver / kg	₹ 91,400	– ₹ 100

Stocks Highlights

JSW Steel Ltd.: Riding the Wave Upward
JSW Steel Ltd. shares surged by 2.36%, climbing from a previous close of ₹917.35 to a last traded price of ₹939.00. But how does it perform when compared to benchmarks?

Performance Highlights:

Stock Returns vs Nifty 100: Over three years, JSW Steel posted a return of 41.08%, lagging behind the Nifty 100’s 47.63%.
Stock Returns vs Nifty Metal: It delivered 41.08%, significantly underperforming the Nifty Metal’s robust 70.36%.
Cost Management: In the fiscal year ending March 31, 2024, the company allocated:
- 4.63% of operating revenues to interest expenses.
- 2.62% of operating revenues to employee costs.

Key Takeaways:

JSW Steel has shown steady growth, but is it enough to catch up with sector benchmarks?
Its disciplined spending could be a key factor in long-term sustainability.

Hero MotoCorp Ltd.: Slipping Into the Red
Hero MotoCorp Ltd. shares dipped by -1.50%, falling from a previous close of ₹4,339.95 to a last traded price of ₹4,275.00. Despite the fall, its long-term performance tells a different story.

Performance Highlights:

Beating 3-Year Revenue CAGR: With annual revenue growth of 11.28%, the company outpaced its 3-year CAGR of 6.96%.
Stock Returns vs Nifty 100: Hero MotoCorp impressed with a three-year return of 81.38%, outperforming the Nifty 100’s 47.63%.
Cost Management: For the year ending March 31, 2024:
- Less than 1% of operating revenues was spent on interest expenses.
- 6.54% of operating revenues went to employee costs.

Key Takeaways:

Hero MotoCorp continues to dominate with stellar long-term returns.
Its efficient cost structure positions it as a reliable player, but can it recover from today’s dip?

Advance Decline Ratio

Today, the advance-decline ratio was 0.64 and the market breadth was negative. The volatility index India Vix decreased by 10.30 to settle at 13.52 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 1096
Decliners – 1713
52Wk High – 46
52Wk Low – 82
High Band Hitters – 85
Low Band Hitters – 113
200d SMA – 23840
50d SMA – 24301
20d SMA – 24339

Top Gainers and Losers Stocks

The top gainers were JSW Steel (+2.36%), ITC (+2.12%), Hindalco (+1.87%), Trent (+1.73%), and HDFC Bank (+1.72%).

The top losers were Hero MotoCorp (-1.50%), Maruti (-0.84%), HCL Technologies (-0.55%), HDFC Life (-0.53%), and Bajaj Finserv (-0.43%).

Top Gainers and Losers Sectors

The top gainers sector were Realty (+1.47%), FMCG (+0.96%), Metal (+0.89%), Consumer Durables (+0.84%), and Financial Services (+0.82%).

The top losers sectors were Media (-0.39%), and Auto (-0.10%).

SECTORS – NOTABLE ACTION
REALTY +1.47%
FMCG +0.96%
METAL +0.89%
MEDIA -0.39%
AUTO -0.10%

Stocks Ban List

(SEBI) F&O ban list (RBLBANK close at +155.01), (GRANULES close at -586.70), (MANAPPURAM close at +184.77), (BANDHANBNK close at +164.38), (HINDCOPPER close at -271.05), and (SAIL close at +121.19) 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.

EXIDEIND, PNB, LTF, CANFINHOME, ABFRL, INDUSINDBK, AARTIIND, METROPOLIS, IGL, BSOFT, DIXON, and BIOCON stocks has the possibilities of entrants in the ban list.