"For the Bank Nifty, on the lower side, 50500 or the 200-day SMA would act as a crucial support zone"; FPI selling continued, with US$441 mn of outflows in the past five days, while DIIs bought US$1.0 bn in the same period
Shrikant Chouhan,
Head Equity Research,
Kotak Securities
Mumbai, 20 December, 2024: The Nifty-50 Index and Sensex ended down around 4.25% down in the past week. Both the mid-cap index and small-cap index lost around 2% outperforming large-caps. Global equity markets witnessed various degrees of sell-off (Brazil down 10%, Japan down 5%, S&P-500 down 4%) in the past week, in the aftermath of the US Fed policy meeting, where the US Fed cautioned on the pace of future rate cuts.
Sector-wise, all sectoral index ended red except for Realty (+.2%) and Pharma (+2.3%). Major sectoral losers for the week include, IT (-4.4%), Capital Goods (-5%), Auto (-4%), Metal (-5%), Power (-5.2%) and Oil & Gas (-3.7%). Within the Nifty, Dr Reddy (+8.5%), Cipla (+2.3%) and Apollo Hospital (+0.9%) gained the most, while Shriram Finance (-8.4%), JSW steel (-7.7%) and Tata Motors (-7.3%) lost the most. On the economy front, goods trade deficit in November widened to US$37.8 bn from US$27.1 bn in October, with exports declining 4.9% yoy, while imports increasing 27% yoy. FPI selling continued, with US$441 mn of outflows in the past five days, while DIIs bought US$1.0 bn in the same period.
In Global, in US Republican lawmakers voted against the deal to fund the government for three months and suspend the U.S. debt ceiling for two years. U.S. president-elect Donald Trump also issued a fresh trade threat to the EU. In Europe, Bank of England held policy unchanged, while Russian policymakers are set to update their monetary policy on Friday. In Asia, China held its key interest rates steady Friday, in line with expectations.
Nifty-50 Index, Sensex Ended 4.25% Down In Past Week
FPI selling continued, with US$441 mn of outflows in the past five days, while DIIs bought US$1.0 bn in the same period: Market Round-Up.
Amol Athawale, VP-Technical Research, Kotak Securities, adds:
In the last week, the benchmark indices corrected sharply, with the Nifty ending 4.7 percent lower, while the Sensex was down by 4100 points. Among sectors, the Pharma index outperformed, rallying over 1.5 percent, whereas the Metal and Bank Nifty indices corrected sharply, shed over 5 percent. During the week, the market slipped below the 20-day and 50-day Simple Moving Averages (SMA), and post-breakdown, selling pressure intensified.
Technically, the weekly charts have formed a long bearish candle, and after a long time, the Nifty closed below the 200-day SMA, which is largely negative. We believe that as long as the Nifty remains below the 200-day SMA or 23800/78300, weak sentiment is likely to continue. Below this level, the market could slip to 23400-23200/77500-77000. On the other hand, if it rises above 23800/78300, the pullback formation is likely to continue up to 24000/80000. Further upside may also occur, potentially lifting the market up to 24200/80600.
For the Bank Nifty, on the lower side, 50500 or the 200-day SMA would act as a crucial support zone. If it sustains below this level, it could slip to 50300-49800. Conversely, if it breaks above 51200, it could bounce back to 51800-52200. Short-term traders should remain cautious and selective, as there is a risk of being trapped at lower levels.
