Dated: 11/01/2025
There has been blood on the streets with no mercy at all where portfolio of investors / traders was redder than the indices. The free fall has been merciless this time holding grudges against the investors / traders with higher volatility on the either side eventually into the favor of bears where Nifty closed near the low’s of the weak at 23437.35. These creates a make or break level or say blind spot for the broader markets where everlasting crucial support in Nifty remains within the pre-defined range of 23000-23200 kind of levels.
FII’s have been in no mercy for the Indian domestic Equity markets as their relentless selling has been nonstop where since the beginning of the October 2024 month FII’s have done massive selling amounting to Rs. 1,70,864.11 crore combined of October, November & so far in wholesome of December 2024. This has lead the entire pressure on the Indian Domestic Equity Markets overall FII’s have sold nearly Rs. 3 Lacs 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. 1,68,286.25 cr. since the beginning of October 2024 & in the Calendar year 2024 they have bought more than Rs. 5 Lacs cr.
Since the broader markets have been witnessing no mercy from the ruthless FII’s who are expected to have been on the sell side due to following reasons:
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Weaker Rupee
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Poor Q2 & Q3 forecast earnings of the companies
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Slowdown in the Indian growth rate
In the indefinite ongoing pain into the markets Nifty is highly likely to only witness its last standing crucial support of 23000-23200 where the fate of the entire bull market scenario will be tested while from hereonwards the potential expected upside & its immediate hurdle could be witnessed hard at 24000 levels followed by 24250 major upside is now expect only if Nifty gives a close on or above 24250 till then the pressurized selling could be witnessed on these upside levels. However, the January series still has hope for a pre-budget rally near the potential upside levels of 24850-25200 kind of levels.
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. But now the eye’s rolled back into the soon coming Q3 GDP numbers which will be released by January 2025 end possibly.
US Federal Reserve cut interest rates by a quarter point on 14th December 2024 and signaled a slower pace of cuts ahead, amid uncertainty about inflation and President-elect Donald Trump’s economic plans. Policymakers voted 11-to-1 to lower the US central bank’s key lending rate to between 4.25 per cent and 4.50 per cent, the Fed announced in a statement. They also penciled in just two quarter-point rate cuts for next year, and sharply hiked their inflation outlook for 2025 which intern puts additional pressure not only on Indian markets but also on US markets as well.
The November series closing have shown good formation on Monthly charts where 23000-23200 0 now remains a major crucial support for a potential upside towards 24000-24250 & 24850-25200 respectively. However, major upside towards 26500-27000 could be seen till the end of February 2025 which instance is expected another ATH in the Nifty.
However, we have also clearly mentioned the expected potential upside could be supported by the FII’s net longs now stands as low as below 17% which continuously signifies & has formed the bottom formation somewhere near 23000-23200 which indeed has turned the game & bottom was formed in Nifty. Now we expect the FII’s long positions to rise towards 48% followed by 67% in the coming month 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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NSE to add Castrol India, Gland pharma, NBCC, Phoenix Mills, Solar Industries & Torrent Power in F&O Contracts.
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Tata steel India crude steel production stood at 5.68 million with 6% YOY growth.
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The heavy engineering arm of Larsen & Toubro has won multiple orders in Q3 of FY25 in the overseas and domestic market.
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GMR Airport limited has entered into a share agreement to acquire 50% share capital of BIRD DELHI general aviation services private ltd
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RESERVE BANK OF INDIA has lifted the restriction imposed on Asirvad Micro finance ltd with respect to sanction or disbursal of loans.
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Tata Motor group global wholesales in Q3 FY25 including JAGUAR land rover were at 341791 nos, higher by 1% as compared to Q3 FY 24.
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Tata Elxsi REPORTED TOTAL INCOME of RS 979.02 CR, up by 3.14% &net profit down by 3.6% [RS 199]
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TCS reported total income of RS 65216 crores, up by 6.13%[YOY] & profit of RS 12444, up by 12.13% [YOY] in Q3 FY2025
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Big loss for JSW Energy total EBITA LOSS OF 550-600 CR.
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One Mobikwik System Ltd Q2 Cons Net Loss 36M Rupees VS Profit 52M [YOY].
International news:
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Vietnam to raise RON -95 gasoline price by 273 dong per liters.
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MICROSOFT to spend $80 billion on AI data centers this year. In which US $3bn investment over 2 years in India cloud and AI infrastructure.
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CHINA says it will adopt a proactive fiscal policy and speed up the implementation of pro-growth measures, as Beijing works to increase public spending this year.
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Toymaker becomes a Billionaire after frenzied HONG KONG IPO.
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US 30-YEAR Yield hits 5% as traded push back next FED RATE CUT.
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AUSTRALIA’S Dollar slips to lowest since April 2020 as the greenback surged on US data
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Gold pares Gains after strong US Dec job data
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 Direct tax collection Net direct tax collection rises 16.45% to Rs 15.82 trillion till 17th December 2024 indicating a strong economy and corporate performance.
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 remained negative with net sell of Rs. 21,357.46 cr. & so far sold more than Rs. 1,70,864.11 cr. so far since beginning of October 2024 but here DII’s have been the buyer’s with Rs. 24,215.87 cr. last week. 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 remained highly volatile where bears were the real king resulting in losing nearly 573.25 points i.e. net loss of 2.45% in a week giving close near to 23431.50. Nifty is highly likely to only witness its last standing crucial support of 23000-23200 where the fate of the entire bull market scenario will be tested while from hereonwards the potential expected upside & its immediate hurdle could be witnessed hard at 24000 levels followed by 24250 major upside is now expect only if Nifty gives a close on or above 24250 till then the pressurized selling could be witnessed on these upside levels. However, the January series still has hope for a pre-budget rally near the potential upside levels of 24850-25200 kind of levels. This time the major potential upside could be triggered by Nifty FMCG followed by Reliance Industries in Oil & Gas space.
Sensex too witnessed same level of volatility where eventual winners were bears where the index lost nearly 1844.20 points for the week i.e. net loss or nearly 2.38% giving close at 77378.91. This too could finds its crucial support within the defined range of 76000-76800 with immediate hurdle now at 80100 any move above could give us upside towards 81000-82000 kind of levels while the potential upside could take Sensex towards another ATH in next 2 months which could be around 86000-87000 kind of levels. This time the major potential upside could be triggered by FMCG followed by Reliance Industries in Oil & Gas space.
Meanwhile Bank Nifty has some last hope at 48500 any breach below could give us 46000 kind of levels & this could bring major weakness in the Nifty itself while if this hold 48500 we could have its immediate potential upside towards 51000 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 the crucial support now shifted lower at 22400 any major weakness could be witnessed only below this while potential upside from hereonwards could be towards 23400 kind of levels.
“Nifty IT” the only strong sector last week it seems like it’s all done with correction & consolidation. For the short term the crucial support in this sector remains 42700-43000 while if supports these levels we may later on get 46000 once again but the broader target of 53000 till March 2025 remains intact. The major move may once again be supported by heavy weights like TCS, Infosys & Wipro.
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 rose at Rs. 25,000 cr. per month.
Brief Levels of Nifty / Sensex/ Bank Nifty / Nifty Financials / Nifty IT:
Nifty CMP: 23431.50
Nifty Hurdle / Immediate Target: 24000-24250 / 24850-25200 / 26500-27000 (As the case may be)
Nifty Immediate Crucial Support: 23000-23200
Sensex CMP: 79223.11
Sensex Hurdle / Immediate Target: 80100 / 81000-82000 / 86000-87000 (As the case may be)
Sensex Immediate Crucial Support: 76000-76800 (As the case may be)
Bank Nifty CMP: 48734.15
Bank Nifty Hurdle / Immediate Target: 51000
Bank Nifty Immediate Crucial Support: 48500
Nifty Financial CMP: 22730.20
Nifty Financial Crucial Target: 23400
Nifty Financial Crucial Support: 22400
Nifty IT CMP: 44609.50
Nifty IT Potential Upside: 46000 / 53000
Nifty IT Crucial Supports: 42700-43000 / 40000-41500 (As the case may be)
Stock on Radar:
Large Caps:
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LIC Housing Finance (CMP 555): This large cap housing finance sector is on the verge of a long term breakout retest zone at 542.50 looks good to accumulate there with strict SL placed at 500 for a potential upside towards 650 in 3 month’s time frame.
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PFC (CMP 404): This large cap PSE power counter looks good to accumulate here at CMP 404 with strict SL placed at 350 for a potential upside towards 486 in no time once the market gets stabilized.
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BHEL (CMP 205): This largecap PSU counter looks good to accumulate here at CMP 205 with strict SL placed at 180 for a potential upside of 249 within 2 months time frame.
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Samvardhana Motherson International (CMP 144): This large-cap auto counter looks good for a reversal from CMP 144 with strict SL placed at 120 one can expect a potential upside towards 190-200 in 3 months time frame.
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Reliance (CMP 1241): This large-cap counter has been on our radar since subdued levels of 1265 & from there it has already tested 1217. This counter again giving opportunity at CMP 1241 with broader markets looking bullish this heavy weight giant may continue to rise from here onwards at 1241 the potential upside form here on wards could be around 1600 in the next 3-6mths time frame.
Mid-Caps:
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CE Info Systems (Map My India)(CMP 1640): Map my India has been on corrective mode since 2748 levels & from there it has corrective nearly 40% in this market turmoil. Looks good to accumulate here at CMP 1640 with strict SL placed at 1480 for a expected potential upside towards 1900-2000 in no time.
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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