NEW YEAR PARTY OVER, BEARS ARE BACK IN ACTION

MARKET HIGHLIGHTS

Market Synopsis:       

As we step into 2025, the market has displayed a bullish trend this week  albeit accompanied by some volatility. By the end of the trading week, the NIFTY 50 experienced a slight decline of 0.76%, closing at 24,004.75. The Diamond and Jewellery sector recorded notable gains, whereas the IT sector faced downward pressure.

The US dollar weakened after four consecutive sessions of gains, while India’s foreign exchange reserves fell by $4.112 billion. The Federal Reserve may need to maintain a restrictive monetary policy for an extended period due to persistent inflation risks. Geopolitical tensions, a depreciating rupee, and thin holiday trading volumes provided support to prices. The rupee declined further, closing at 85.73 against the US dollar.

In China, the Shanghai Composite Index dropped 1.57% on Friday to close at 3,211, marking its third consecutive session of losses and a weekly decline of 5.6% amid disappointing factory data.

Gold and silver prices showed positive momentum during the week, with gold rising by ₹250 per 10 grams and silver increasing by ₹2,800 per kilogram. However, both metals experienced slight declines toward the end of the week. Meanwhile, oil prices surged to their highest levels in over two months, fueled by expectations of government policies aimed at bolstering global economic growth.

 Market Developments:

•  Indo Farm Equipment’s IPO was subscribed 227.57 times, reflecting strong investor demand. The company
  manufactures tractors, cranes, and farm equipment, positioning itself as a key player in the sector.
  
  
•  NaBFID invested ₹7,745 crore in AAA-rated bonds by NDR InvIT to boost its warehousing sector growth. The funds will support strategic expansion amid rising demand for logistics driven by manufacturing and e-commerce. This positions NDR InvIT to address key infrastructure gaps.
  
  
• The Securities and Exchange Board of India (SEBI), on December 31, 2024, announced the launch of the Mutual Funds Lite (MF Lite) framework for passively managed mutual fund schemes.
  
  
•  Pradhin Ltd. a growing player engaged in the agriculture, in its board meeting, discussed a 1:10 stock split, a dividend declaration of up to 100 per cent, and the issuance of bonus shares at a 2:1 ratio.
  
  
• Starting January 2025, EPFO’s Centralized Pension System will benefit 68 lakh pensioners by enabling seamless disbursement without transferring PPOs, even with location or bank changes.
  
  
• SEBI’S Investigation into Ketan Parekh uncovered a Front-running scheme that generated Rs. 65.77 crore in unlawful profits. The regulator debarred Parekh from trading and issued show-cause Notices to 22 entities involved.

FII-DII DATA:

Net Cash (in Rs. crores):
30th DEC-
FII- (1893.16)
DII- 2173.86
31st DEC–
FII- (4645.22)
DII- 4546.73
1st JAN-
FII- (1782.71)
DII- 1690.37
2nd JAN-
FII- 1506.75
DII- 22.14
3rd JAN-
FII-(4227.25)
DII- 820.60

TOP GAINERS-

Indian Renewable Energy Development Agency Ltd. – 17.1%
Oil India Ltd. – 13.2%
Indraprastha Gas Ltd. – 13.1%

TOP LOSERS:

Phoenix Mills Ltd. – (7.2%)
Prestige Estates Projects Ltd. – (5.5%)
Apollo Tyres Ltd. – (5.3%)

Top Performing Sector
Consumer Durables – 4.06%

Worst Performing Sector
Realty – (2.45%)

Technical Analysis: 

The NIFTY 50 began the week on a bearish note, driven by high selling pressure and heightened volatility. However, as the week progressed, a bullish trend emerged, fueled by investors’ optimism for the New Year. This resulted in the formation of a reasonable bullish candlestick with prominent upper and lower shadows, indicative of a “high-wave” candlestick pattern. The near-term uptrend for NIFTY 50 remains intact, with a decisive move above Thursday’s high of 24,226 likely to attract renewed buying interest, targeting levels of 24,400–24,500. Immediate support is seen at 23,930–23,840, with additional support at 23,450–23,550.
The Indian stock market exhibited mixed technical signals during the week. The NIFTY 50 closed at 24,004.75, marking a 0.87% increase. However, market sentiment remains cautious. A failure to sustain above the 24,000 level could increase vulnerability to further downside movement.
Key technical indicators presented a neutral outlook. The RSI (14) stood at 48.7, signaling a neutral stance, while the Simple Moving Average (20) at 24,606.33 indicated a bearish signal. The Ultimate Oscillator registered a value of 49.38, further suggesting neutrality.
Looking ahead, heightened volatility is expected in the coming week, influenced by contrasting actions of Foreign Institutional Investors (FIIs) and Domestic Institutional Investors (DIIs). Notably, FIIs recorded the highest shorting of NIFTY futures last week, and the index closed at the same level as January 2nd. This trend could persist, potentially pushing the index towards its next support at 23,500. Market direction will also be shaped by geopolitical developments, particularly actions by Donald Trump, and the subsequent reactions from FIIs and DIIs.