NIFTY OUTLOOK FOR 31 DECEMBER 2024

 The Indian stock markets witnessed a sharp downturn in late afternoon trading on Monday, with the BSE Sensex and NSE Nifty indices closing significantly lower. Key factors such as foreign institutional investor (FII) outflows, weak global cues, and a depreciating rupee weighed heavily on investor sentiment.

Key Indices Performance

• BSE Sensex: The index closed at 78,248, down 450 points or 0.6% from the previous session’s close. The Sensex fell over 1% from its intraday high.

• NSE Nifty: Nifty ended the session at 23,645, losing 168 points or 0.7%. Like the Sensex, it also slipped more than 1% from its intraday peak.

Market breadth remained weak throughout the session, indicating broad-based selling pressure across sectors.

Sectoral Highlights

• Gainers:

  • Nifty Pharma: Bucked the bearish trend with a 1% gain, driven by strong performances from stocks like Sun Pharma (+1.2%) and Cipla (+1%).

  • Other indices such as Consumer Durable, FMCG, and IT managed to close slightly positive.

• Losers:

  • Nifty Auto: The worst-performing sector, down 1.4%.

  • Nifty Bank: Lost 0.7%, despite leading an intraday recovery earlier.

  • Energy, Infrastructure, and Metals indices also witnessed losses ranging from 0.5% to 1.5%.

Stock Highlights

• Top Gainers:

  • Adani Enterprises: Surged 7.5% to close at ₹2,592, making it the top performer on the Nifty.

  • HCL Tech: Gained 2%.

  • Tech Mahindra: Rose by 1.7%.

• Top Losers:

  • Hindalco: Fell 2.6%.

  • Bharat Electronics, Trent, and Tata Motors: Declined by up to 2.5% each.

Volatility and Currency Impact

• India VIX: The volatility index increased by 5.5% to close at 13.97, reflecting heightened uncertainty.

• Rupee Depreciation: The Indian rupee continued to weaken, nearing the 86-per-dollar mark, reducing the appeal of Indian equities to foreign investors due to lower returns in dollar terms.

Global and Domestic Factors

The persistent FII outflows and global cues contributed to the bearish sentiment. A weakening rupee added to the concerns, making Indian assets less attractive to international investors. Broader global uncertainties and sector-specific headwinds also influenced the day’s trading pattern.

Outlook

With continued FII selling pressure and currency weakness, the near-term outlook for Indian equities remains cautious. Market participants will closely monitor global economic developments and domestic macroeconomic indicators to assess further movement.

Investors are advised to adopt a selective approach, focusing on sectors showing resilience, such as pharmaceuticals, and remain cautious about high-volatility segments like autos and metals.