Markets

Market Outlook: Cautious Start Anticipated

Published December 24, 2024

The markets are set to begin the day on a subdued note this Tuesday, as GIFT Nifty futures are currently down by 11 points, settling at 23,760. This indicates a potential flat-to-negative opening for major benchmark indices. Analysts are urging investors to adopt a cautious approach, given that key resistance levels have yet to be overcome.

Key Levels to Monitor

In this trading environment, the levels between 23,850 and 23,870 serve as significant barriers for the markets. Additionally, the bearish gap ranging from 24,000 to 24,150 remains crucial. Traders are advised to consider reducing long positions if the market bounces back below these levels. On the downside, immediate support is expected around 23,600 to 23,500; however, a breach below this range could lead to further corrections towards 23,350.

Market Sentiment

  • India VIX: The fear gauge has decreased by 10.3%, now standing at 13.52, which signals a reduction in market volatility.

  • FII/DII Activity: Foreign institutional investors (FIIs) sold shares worth Rs 168 crore, while domestic institutional investors (DIIs) net purchased shares totaling Rs 2,228 crore.

Global Cues

  • US Markets: Wall Street finished positively, with the Dow, S&P 500, and Nasdaq recording gains of 0.16%, 0.73%, and 0.98%, respectively.

  • Asian Markets: A mixed performance was observed, as Hang Seng futures rose by 0.1%, while Nikkei 225 futures decreased by 0.1%.

  • Gold and Dollar: Gold prices remained stable, and the dollar maintained its strength amid expectations that interest rates will remain elevated for a longer period.

Stocks in Focus

  • F&O Ban: Stocks like Granules, Manappuram, Hindustan Copper, Bandhan Bank, and RBL Bank are currently under the Futures and Options ban due to surpassing position limits.

  • Sectors to Watch: Analysts are showing preference for the pharma and healthcare sectors for long positions, while they anticipate mixed performances in other sectors.

Rupee Watch

The Indian rupee depreciated by 7 paise, closing at 85.11 against the US dollar on Monday. This decline is primarily attributed to a strong dollar index influenced by the Federal Reserve's hawkish stance.

Expert View

Ajit Mishra, Senior Vice President of Research at Religare Broking, recommends that traders maintain a negative bias on the indices until clear signs of a rebound are visible. He emphasizes the importance of focusing on selective opportunities within individual stocks. Investors are advised to stay alert to ongoing cautious sentiment and to pay attention to sector-specific opportunities.

markets, stocks, resistance