Both the mid-cap index and small-cap index gained around 1.5% outperforming large-caps
Shrikant Chouhan,
Head Equity Research,
Kotak Securities
Mumbai, 3 January, 2025: The Nifty-50 Index and Sensex each gained 1% in the past week. Both the mid-cap index and small-cap index gained around 1.5% outperforming large-caps. Sector-wise, all sectoral index ended in green except for Realty (-1.8%) and Bank Nifty (-0.5%). Major sectoral gainers for the week include, Oil and Gas (+4.3%), Auto (+3.9%), Consumer Durable (+3.3%), FMCG (2.3%) and Pharma (+1%). Within the Nifty, Dr Reddy (+10.5%), Eicher Motors (+9.3%) and Maruti Suzuki (+8.9%) gained the most, while Wipro (-4.5%), Hindalco (-4.1%) and ICICI Bank (-3.3%) lost the most. FPI were net sellers in the past five days, while DIIs were net buyers in the same period.
In Global, in US the number of Americans filing new applications for unemployment benefits dropped to an eight-month low of 211,000 last week, below the 222,000 estimate. The dollar index climbed to 109.54, its highest since Nov. 10, 2022. In Europe, Turkey’s consumer price index fell to 44.38% on an annual basis in December, down from 47.09% in November. Investors are also watching out for the latest inflation figures from Poland, as well as unemployment reports out of Germany and Spain and mortgage data from the U.K. In Asia, People’s Bank of China is reportedly planning to cut interest rates from the current 1.5% level “at an appropriate time” this year. China will also expand issuance of ultra-long bonds and ramp up efforts to boost consumption. In South Korea the investigator has failed to detain impeached President Yoon Suk Yeol.
According to Amol Athawale, VP – Technical Research, Kotak Securities, in the last week, the benchmark indices witnessed a sharp recovery from lower levels. The Nifty ended 0.75 percent higher, while the Sensex was up by 524 points. Among sectors, the Consumer, Auto, and Oil and Gas indices outperformed, with the Consumer index rallying 4 percent and the Auto and Oil and Gas indices gaining over 3 percent. In contrast, the Reality index suffered the most, shed nearly 2.5 percent.
During the week, the market not only cleared the 200-day Simple Moving Average (SMA) but also comfortably closed above it, which is largely positive. Technically, it has formed a reversal formation on both daily and weekly charts, supporting a further uptrend from the current levels. We are of the view that the short-term texture of the market is bullish; however, before any fresh breakout, we could see range-bound activity.
For traders now, the 200-day SMA, or the 23,900-23,750 / 78600-78100 level, would be key support zones, while the 50-day and 20-day SMAs, or the 24,150-24,200/79600-79800 levels, could represent crucial resistance areas. If the market rises above 24,200/79800, the chances of reaching 24,400-24,500/80200-80500 would turn bright. Conversely, if it falls below 23,750/78100, sentiment could change. Below this level, traders may prefer to exit their long positions.
For Bank Nifty, the 200-day SMA, or the 50,500-50,600 range, would act as a critical support zone. On the upside, the 50-day and 20-day SMAs, or the 51,800-52,200 range, could be crucial resistance areas for the bulls.
