Markets open with caution amid global economic signals
Equity markets opened with a mildly negative sentiment on Monday, reflecting a complex global economic landscape and anticipation of key central bank decisions this week. The Sensex initially opened at 82,000.31, quickly sliding to 82,088.72, down 44.40 points or 0.05 per cent, while the Nifty50 index opened at 24,753.40 and subsequently dipped to 24,744.80, losing 23.50 points or 0.09 per cent.
Foreign Institutional Investors (FIIs) showed a positive turn, purchasing equities worth ₹2,335 crore on December 13, providing a potential counterbalance to the market’s cautious start. “The excessive volatility witnessed recently reflects sharp differences in market trend perceptions,” noted Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services. He cautioned that while FII buying is encouraging, investors should not assume continued investment, given potential headwinds like a strong dollar and high US bond yields.
The market’s technical indicators suggest a nuanced outlook. Hardik Matalia from Choice Broking highlighted key support and resistance levels, stating, “The Nifty can find support at 24,600, followed by 24,500 and 24,400. On the higher side, 24,850 can be an immediate resistance.”
Sector performance showed mixed signals. The media index experienced significant losses, dropping nearly 6 per cent last week, while capital market and IT indices rallied over 2 per cent. Stock-specific movements added further complexity to the market dynamics.
Top gainers included IndusInd Bank (1.21 per cent), Shriram Finance (0.59 per cent), ITC (0.43 per cent), Reliance (0.37 per cent), and Grasim (0.27 per cent). Conversely, JSW Steel (-1.24 per cent), Titan (-1.18 per cent), Bharti Airtel (-0.94 per cent), Apollo Hospitals (-0.89 per cent), and TCS (-0.83 per cent) emerged as top losers.
The market’s attention is firmly fixed on upcoming global economic events. “Investors are awaiting the US Federal Reserve’s policy rate decision later this week,” explained Ameya Ranadive, Senior Technical Analyst at StoxBox. The expectation is a potential quarter-percentage point rate cut, which could significantly influence market sentiments.
China’s recent economic indicators provide additional context to the global economic environment. Industrial output rose 5.4 per cent year-on-year in November, showing tentative stabilization, while new home prices fell at the slowest pace in 17 months, suggesting potential recovery in the property sector.
Shrikant Chouhan from Kotak Securities offered a technical perspective: “The market not only reclaimed the 50-day Simple Moving Average but also closed above it, which is largely positive.” He suggested a potential bullish trend if the market maintains its current levels, with possible rallies towards 25,000 and potentially 25,200.
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Bitcoin’s recent surge to a record high above $106,000, reportedly boosted by comments from President-elect Donald Trump about creating a strategic bitcoin reserve, adds another layer of intrigue to the global financial landscape.
The India VIX, a measure of market volatility, remained relatively calm at 13.0525, indicating a relatively stable sentiment despite the underlying market complexities.