Dated: 21/12/2024
It’s been blood all over the Dalaal Street lately where no one was left who remained unharmed. The bear gang took the sword into everyone’s head & beheaded everyone who got into their way. Nifty after the subsequent week’s expected potential upside last week did not left a single day when blood was not shed on Dalaal Street. Nifty once again with pressurized selling came down to test 200 DEMA which eventually remains a crucial level where everyone hopes of a revival otherwise on the larger picture broader trend will get reversed.
After remaining vigilant in the initial days of December the second half so far has been under severe pressure with non top selling by FII’s. Since the beginning of the October 2024 month FII’s have done massive selling amounting to Rs. 1,64,541.18 crore combined of October, November & so far in December 2024 series. 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 nearly Rs. 5 Lacs cr.
The entire monument of unconditional selling by foreign institutions has hampered the sentiment of the broader markets which now once again seems like could show some pause as its Christmas & FII’s generally go to vacation on these days of the year if they do so we could see some pull back from these levels in Nifty which also referred to as 200 DEMA should hold & the possible revert towards upside this time could be 24300-24500. However, the crucial supports now remains on 2 scales initially at 23400-23700 while on the lower end 23000-23200 kind of levels. With major heavy weight counter underperforming if these levels worked perfectly this underperformance could end here.
As the blood bath week finally ended the broader markets are waiting for a meaningful upside from the current levels. Nifty now in the hope of some support from 200 DEMA with expected initial volatility the Nifty is highly likely to rebound. 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%
Along with the US Federal Reserve cut interest rates by a quarter point Wednesday 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 followed by 23400-23700 now remains a major crucial support for a potential upside which 24300-24500. However, major upside towards 26500-27000 could be seen till the end of January 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 stand near to 30-32% 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 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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Govt appointed Ram Mohan Rao Amara as sbi md for a period of 3 years.
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SBI, PNB, HDFC, ICICI, Canara Bank on 1,3,5 year fixed deposits 7.25 % interest on 444 days.
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Canar bank has increased the MCLR for all tenures by 5 basis point
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Punjab & Sind bank raises Rs. 3000 cr. for maiden infrastructure bonds
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Amazon exits shoppers stop by selling 4% stake for INR 276cr
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Adani group to investors 200 billion for thermal power plant in Bihar
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RBI cancel certificate of registration of four NBFCs
International
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World Bank approved USD 250 million funding for Moroccan Agri food sector.
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Sweden risks Bank cuts policy rate to 2.5%
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Us graphite firms seek 920% duty to thwart china on EV material
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Bank of Thailand leaves key rate at 2.25%
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Federal bank ltd has allotted 432290 equity share with face value of Rs. 2 each to the option grantees upon exercise of stock option under ESOS 2017 scheme
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US Federal Reserve cut interest rates by a quarter point Wednesday 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
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 remained negative with net sell of Rs. 15,828.11 cr. & so far sold more than Rs. 1,64,541.18 cr. so far since beginning of October 2024 but here DII’s have been the buyer’s with Rs. 11,873.92 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 was hammered by continuous selling pressure by FII’s with high volatility & no sign of relief it made low’s of 23537.35 to give a close at 23587.50 with net loss of 1180.80 i.e. 4.77% loss. In the coming week ahead Nifty could form its crucial support here at 200 DEMA i.e. which could be formed near 23400-23700 followed by 23000-23200 with potential upside could be towards 24300-24500 followed by 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.
Sensex on the other hand too remained fragile with blood bath on Dalaal Street. This too could finds its crucial support within the defined range of 77000-78000 followed by 76000-76800 with immediate potential 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.
However, Bank Nifty now remain on a crucial support level where 49000-50000 remains a crucial support levels which could if trigger & holds on the potential upside from here onwards could be 52000-53000 kind of levels. The broader range could be support by certain heavy weight in PSU heavy weight banks like PNB & SBI etc. & certain private banks like; HDFC Bank.
In Nifty Financial Services the crucial support now shifted lower within the defined range of 23000-23420 while potential upside from hereonwards could be towards 24200-24500 kind of levels.
“Nifty IT” has tested 46088.90 & furthermore these levels have shown profit booking as earlier anticipated & mentioned in our previous articles. 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: 23587.50
Nifty Immediate Target: 24300-24500 / 25000-25200 / 26500-27000 (As the case may be)
Nifty Immediate Crucial Support: 23400-23700 / 23000-23200 (As the case may be)
Sensex CMP: 78041.59
Sensex Immediate Target: 81000-82000 / 86000-87000 (As the case may be)
Sensex Immediate Crucial Support: 76000-76800 / 77000-78000 (As the case may be)
Bank Nifty CMP: 50759.20
Bank Nifty Immediate Target: 52000-53000
Bank Nifty Immediate Crucial Support: 49000-50000
Nifty Financial CMP: 23591.70
Nifty Financial Crucial Target: 24200-24500
Nifty Financial Crucial Support: 23000-23420
Nifty IT CMP: 43771.05
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 India (CMP 901): This large-cap PSU counter looks like can done its selling here at CMP 901 with SL placed at 850 one can expect a potential upside towards 1000-1070 in 1 month time frame.
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NTPC Green (CMP 132): 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 132.
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ITC (CMP 464): Heavyweights in FMCG counter again looks good. ITC can be accumulated here at CMP 464 for a potential upside towards another ATH of 550 in 3 month’s time frame.
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Reliance (CMP 1205): This large-cap counter has been on our radar since subdued levels of 1265 & from there it has already tested 1330. This counter again giving opportunity at CMP 1205 with broader markets looking bullish this heavy weight giant may continue to rise from here onwards at 1205 the potential upside form here on wards could be around 1600 in the next 3-6mths time frame.
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Cochin Shipyard (CMP 1494): This large cap counter looks like can from bottom here somewhere at 1430 with strict SL placed at 1260 one can expect a potential upside towards 1800 in 1 month time frame.
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
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