Dated: 07/12/2024
Broader trend remains on the bull’s side as Nifty gave one of the smoothest move since the beginning of October series sell off. It took Nifty to 9-10 weeks to finally give the bull’s a peaceful weekend where the confirmation of trend reversal posted a meaningful relaxation. Also it’s now first time where FII’s & DII’s turned net buyers for the week.
It’s now been finally 9-10 weeks where both the institutional investors let it be domestic (DII’s) or foreign(FII’s) both remained net buyer’s which now indicates the baLl is in the hands of the bull’s now. However, since the beginning of the October 2024 month FII’s have done massive selling amounting to Rs. 1,60,420 crore combined of October & November 2024 series. This has lead the entire pressure on the Indian Domestic Equity Markets overall FII’s have sold nearly Rs. 2,85,452.43 cr. in the Calendar year 2024 while on the contrary DII’s were the main supporters of the entire Indian domestic Equity Markets with whopping buying of Rs. 1,51,738.50 cr. since the beginning of October 2024 & in the Calendar year 2024 they have bought nearly Rs. 4,92,350.40 cr.
The entire structural selling put Nifty into a pressured low of 23264.15 with massive 3013 points fall from the ATH of 26277.35 while the bottom was made somewhere 23264.15. However, this pre-news structured selling seems legit when Q2 GDP data was published last Friday where lower than estimated GDP came as “India’s GDP growth slows in Q2 FY 2024-25 to 5.40% while Fiscal Deficit at 46.50% of FY 2024-25 targets. It now looks like FII’s must have sensed earlier these possibilities of GDP slow down which lead them for a relentless selling. Followed by last week RBI announced its Bi-monthly monetary policy where CRR was reduced by 50bps. Meanwhile following are the key high lights by RBI policy last week:
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Repo rate unchanged at 6.5%
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Monetary policy stance continues to be in Neutral
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GDP growth for FY25 reduced to 6.6% from 7.2%
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GDP Forecast for Q1 FY25 at 6.9% Q2 at 7.2%
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Inflation forecasted to be 4.8% FY25.
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CRR TO 4%
Nifty last week initiated the week with a muted phase & some dull beginning but eventually bull’s caught up the pace where the reasonable supported buying by both the institutional investors (FII’s & DII’s) lead the Nifty to rise towards 24857.75 on the upside where 24000 on downside remained a resilient support. It now seems like the reasonable buying may continue & take the Nifty towards 25200 with major economy booster by RBI’s CRR cut where banks will have enough liquidity while on the downside the crucial support now remains at 24000 mark.
The November series closing have shown good formation on Monthly charts where 23000-23300 now remains a major crucial support for a potential upside which 25000-25200. However, major upside towards 26500-27000 could be seen till the end of January 2025 which instance is expected another ATH in the Nifty.
We have clearly mentioned that the entire expected upmove could be broadly supported by Banking & Financial Services sector followed by “Nifty IT” sector which if holds on the current levels could trigger the potential upside into the broader markets. In some cases Nifty PSU Banks may also outperform & support the broader markets. The broader markets may still follow the same catch up with Banking & Financial Services sector with some focused on Oil & Gas space but “Nifty IT” has tested 45000 our most desirable level & may now show some sideways to profit booking so may not come up to support the major trend in coming week. Heavy Weights specifically Reliance industries, SBI & PNB are likely to lead the entire potential upmove from here onwards.
However, we have also clearly mentioned the expected potential upside could be supported by the FII’s net longs now stand near to 44-46% which continuously signifies & has formed the bottom formation somewhere near 23000-23300 which indeed has turned the game & bottom was formed in Nifty. Now we expect the FII’s long positions to rise towards 67% in the coming weeks ahead which may take Nifty & broader markets even on the higher levels.
In the wholesome broader markets witnessed some key events & their outcomes last week which are described as follows:
Domestic News:
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UPI Credit option is now open to small finance banks.
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CPI inflation spiked to 6.2% in October from 5.5% in September.
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Larsen and Toubro co got favorable order of tribunal allowing Appeal filed by co.
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Paytm company sell its stake in Japan’s PAYPAY to Softbank for USD 250 million – MC.
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India has not taken any steps towards de -dollarization and is only looking to de risk domestic trade from geo- political upheaval’s
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Maruti Suzuki said to take 4% price hike from Jan 2025
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As per CITI FEDERAL BANK, PNB biggest beneficiaries of CRR cut of 50bps by RBI.
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India has become the most targeted nation for mobile malware attacks ahead of the US nation.
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DLF: A lot of new commercial project will be on stream in next 1 year aiding rentals.
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Vishal mega mart to floats Rs 8000 crore IPO on December.
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Overseas investors are returning to India’s sovereign bonds eligible for global index inclusion as local debt gain on bets the central bank will boost liquidity.
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Adani run Ambuja cement evaluates deal to acquire Star cement for expansion in NE.
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The domain jiohotstar.com is finally with the Reliance JV
International
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Egypt concluded its initial public offering of 30% of united bank
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CHINESE HAS ‘A lot of room to raise fiscal deficit
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Zambia is CES sells $ 97 million green bond to expand solar plant
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UK bank NatWest is headed for biggest annual gain since 1993
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Canada jobless rate jumps to 6.8% raising odds of big cut
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A $500 billion haul reignites passive controversy on wall street
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Foreign investors flock to south African bonds skip stock
As earlier anticipated “Nifty IT” has shown strength last week as it enters to our previously mentioned crucial support zones of 40000-41500 & bounced back towards 45027.95 to give a close at 44716.05. In all these turmoil & bottom formation the one sector which stood tall was “Nifty IT” which remained untouched in last 8 weeks as of now where investors / trades remained into panic with bleeding portfolio but this sector stood tall. It has came to our target zone of 45000 for short term so now for the next 1-2 weeks we remain neutral in this sector while positional view towards 53000 mark till March 2025 remains intact in the second half of the FY 2024-25. In the between the heavy weights like TCS Infosys & Wipro may continue to remain into focus for medium term.
Advance tax collection in FY till June 15 surged 27.6% to ₹1.48 lakh crore, with ₹1.14 lakh crore as corporate tax and ₹34,362 crore as personal income tax, indicating a strong economy and corporate performance.
The Centre’s gross tax collections (post refunds but before transfers to states), stood at Rs 4.6 trillion in the first two-months of the current financial year, 15.9% higher than the year year-ago level, data released by the Controller General of Accounts (CGA) showed on Friday. This is against 10.6% annual growth pegged in the Budget for FY25.
Net tax revenue (after refunds and after devolution to states) during April-May, stood at Rs 3.19 trillion, accounting for 12% of the Budget estimate of Rs 26.02 trillion. However, during the same period of FY24, net tax revenue had accounted for about 16% of the Budget target.
In the institutional segment the FII’s turned net buyer’s with net buying worth of Rs. 11,933.59cr. in a single week & so far sold more than Rs. 1,60,420 cr. so far since beginning of October 2024 but here DII’s have been the best buyer’s with Rs. 1,792.47 cr. last week which helped Nifty to retain the bottom of 24000. FII’s have been brutal but history has shown whenever FII’s have shown merciless selling pressure we somehow make another bottom supported by DII’s massive buying as monthly retail SIP data surpassed Rs.25,000 cr. p.m.
Nifty last week made low of 24008.65 to give a close at 24677.80 with net gain of 546.7 points i.e. 2.26% gain for the week. Nifty in the beginning of December series gave good buying which with bullish closing last week. In Nifty crucial supports have shifted higher at 24000 kind of levels while potential upside in the coming week could be towards 25200 kind of levels while the major upside towards 26500-27000 which is another ATH in Nifty possibly till the end of January 2025. However, the entire follow-up is set for a potential upside the major movement could be supported well by few heavy weights like; Reliance Industries Ltd., SBI & PNB etc.
In Sensex the the close was at 81709.12 with net gain of 1900 points i.e. net gain of 2.38% last week. The crucial supports have shifted higher at 79000 while potential upside could be towards 83100 while the potential upside could take Sensex towards another ATH in next 2 months which could be around 86000-87000 kind of levels. However, the entire follow-up is set for a potential upside the major movement could be supported well by few heavy weights like; Reliance Industries Ltd, TCS, SBI & PNB etc.
Bank Nifty major upside could be towards 54000-54500 kind of levels while crucial supports now shifted higher within the defined range of 52000 kind of levels The broader range could be support by certain heavy weight in PSU heavy weight banks like PNB & SBI etc.
In Nifty Financial Services immediate crucial support now remains at 23800 with potential upside now remains at 25000-25200 in the coming month ahead.
“Nifty IT” has shown strength last week as it enters to our previously mentioned crucial support zones of 40000-41500 & bounced back towards 45027.95 to give a close at 44716.05. In all these turmoil & bottom formation the one sector which stood tall was “Nifty IT” which remained untouched in last 8 weeks as of now where investors / trades remained into panic with bleeding portfolio but this sector stood tall. It has came to our target zone of 45000 for short term so now for the next 1-2 weeks we remain neutral in this sector while positional view towards 53000 mark till March 2025 remains intact in the second half of the FY 2024-25. In the between the heavy weights like TCS Infosys & Wipro may continue to remain into focus for medium term.
Till October 2024 the number of Demat Accounts has risen to whopping 20cr. this not only helps the capital markets directly but also directly to Equity investments.
The monthly SIP in Indian markets now raised at Rs. 25,000 cr. per month.
Brief Levels of Nifty / Sensex/ Bank Nifty / Nifty Financials / Nifty IT:
Nifty CMP: 24677.80
Nifty Immediate Target: 25000-25200 / 26500-27000 (As the case may be)
Nifty Immediate Crucial Support: 24000 / 23000-23300 (As the case may be)
Sensex CMP: 81709.12
Sensex Immediate Target: 83100 / 86000-87000 (As the case may be)
Sensex Immediate Crucial Support: 79000
Bank Nifty CMP: 53509.50
Bank Nifty Immediate Target: 54000-54500
Bank Nifty Immediate Crucial Support: 52000
Nifty Financial CMP: 24703.70
Nifty Financial Crucial Target: 25000-25200
Nifty Financial Crucial Support: 23800
Nifty IT CMP: 44716.05
Nifty IT Potential Upside: 53000
Nifty IT Crucial Supports: 40000-41500
Stocks on Radar:
Large Caps:
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NTPC Green (CMP 144): This large cap counter a newly listed entity may not be just done with recent high’s. It has potential to test 200 till December end with crucial SL placed at 120 from CMP 144.
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Reliance (CMP 1312): This large-cap counter has been on our radar since subdued levels of 1265 & from there it has already tested 1330. This counter still looks good to add here at CMP 1312 with broader markets looking bullish this heavy weight giant may continue to rise from here onwards at 1312 the potential upside form here on wards could be around 1600 in the next 3-6mths time frame.
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IRFC (CMP 158): This large-cap PSU counter looks like can form bottom here somewhere at 158 so looks good to accumulate here at CMP 158 with strict SL placed at 145 for a potential upside towards 190
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AB Capital (CMP 198): This large cap NBFC counter looks good to add here at CMP 198 with potential upside of 250 in 1 month time frame.
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SBI Life (CMP 1449): This large cap counter looks like can form bottom here somewhere at 1350-1400 one can accumulate here for a potential upside towards 1600.
About the Author:
Mr. Vishal Gupta a SEBI Registered Research Analyst is the founder of “VG STOCK RESEARCH”, founder of “THE ANALYSIS ROOM”, a writer & an advisor having rich experience in Indian Equity Markets who has spent years comprehending an industry wide shift and risk management with more than 12+ years exploring in depth analysis of the Equity & Derivatives with accuracy of 90% and above.
He has also been into teaching Fundamental Analysis for quite some time giving investors/traders comprehensive knowledge & skills of Indian Equity Markets.
Email I’d: contact@vgstockresearch.com
Contact: +91-9953934544
Website: https://vgstockresearch.com/
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