Market Wrap: Flat Close on December 10 – What to Expect on December 11

Market Prediction

Market Wrap-Up and Prediction for December 11: Key Insights and Trends

The Indian stock market ended on a flat note on December 10, reflecting cautious sentiment among investors.

Benchmark indices showed limited movement, with the Nifty closing at 24,610.05, down 8.95 points or 0.04%, while the Sensex gained 1.59 points, finishing at 81,510.05.

Despite this muted performance, activity in the broader market remained robust, with 1,970 stocks advancing, 1,828 declining, and 122 remaining unchanged.

This stagnation comes amid mixed global and domestic cues, with participants closely monitoring developments such as economic stimulus measures in China and key macroeconomic indicators in India.

Here’s a detailed analysis of the day’s market dynamics and the road ahead.

Market Highlights and Sectoral Performance

While the major indices remained nearly unchanged, sectoral and stock-specific trends stood out:

Top Performers

• Gainers on the Sensex:
  Stocks like Bajaj Finserv, Infosys, HCL Technologies, Wipro, and Shriram Finance were the top gainers, benefiting from strength in the IT and financial sectors. IT stocks, in particular, surged as global demand and a weaker rupee bolstered positive sentiment.
• Sectoral Winners:
  • IT Sector: Gained 1%, buoyed by strong global cues and favorable currency movement.
  • Realty Sector: Continued its strong performance, ending the day with gains exceeding 1%, as investor interest in real estate remained steady.
  • PSU Banks and Metals: Both saw gains of 0.4-0.6%, underpinned by optimism in commodity prices and improving credit growth metrics.

Top Underperformers

• Losers on the Sensex:
  Stocks such as Bharti Airtel, Adani Ports, Adani Enterprises, Dr. Reddy’s Laboratories, and HDFC Life faced selling pressure, leading the decliners.
• Sectoral Laggards:
  • Media and Telecom Sectors: Declined by 0.5-1%, reflecting profit booking after recent rallies.
  • Power Sector: Saw a modest drop of 0.5%, likely influenced by muted demand forecasts.

Meanwhile, the BSE Midcap and Smallcap indices performed better than the benchmarks, gaining 0.3%, signaling sustained investor interest in broader market opportunities.

Technical Outlook: Chart Patterns and Key Levels

According to Aditya Gaggar, Director at Progressive Shares, the Nifty experienced fluctuations throughout the day.

After a modest rise post-opening, the index encountered selling pressure, which pushed it down to test its immediate support of 24,550. However, select heavyweights in the last trading hour helped Nifty recover slightly.

Technical Indicators:

1. Hammer-like Pattern: On the daily chart, the Nifty formed a hammer-like pattern, a classic bullish reversal signal. This indicates strong buying support near the 24,500-24,550 range.
2. Key Resistance and Support Levels:
   • Immediate support: 24,500-24,550
   • Resistance: 24,800-24,850

Analysts expect the Nifty to remain in a consolidation range of 24,400-24,800 in the short term, with a potential upward trajectory toward its recent high of 24,850, provided the support zone holds.

Factors Influencing Market Sentiment

1. Global Economic Cues

• China’s Stimulus Announcement: Beijing’s plans to adopt a soft monetary policy and boost domestic consumption have sparked optimism globally. This marks the first significant policy pivot in 14 years and is seen as a response to trade tensions and slowing economic growth. While this move has fueled market interest, Sunil Subramanian, a market veteran, cautions that implementation might fall short, as seen in past instances. Investors are advised to temper expectations while keeping a close watch on how these measures unfold.
• Favorable Global Markets: Bullish sentiment in international markets continues to support Indian equities, particularly export-driven sectors like IT and pharmaceuticals.

2. Currency Dynamics

The Indian rupee’s weakness against the US dollar is playing a dual role. While it raises import costs, it boosts the competitiveness of export-oriented sectors like IT.

Osho Krishna, Technical and Derivative Analyst at Angel One, highlighted that the IT sector’s strength is underpinned by this currency dynamic, which is likely to sustain the bullish trend in technology stocks for the foreseeable future.

3. Domestic Macroeconomic Stability

• CPI Inflation Data: With the latest CPI figures aligning with market expectations, fears of a sharp monetary policy change by the Reserve Bank of India have eased. This provides stability to markets, allowing participants to focus on growth opportunities.
• Midcap and Smallcap Resilience: The outperformance of midcap and smallcap indices highlights broader market participation, a positive sign of investor confidence in India’s economic fundamentals.

Sectoral Insights and Strategic Outlook

1. IT Sector:
   The IT sector remains a standout performer, driven by global demand recovery and currency advantages. Major players like Infosys and HCL Technologies are expected to continue benefiting from robust order books and strong client engagement.
2. Realty Sector:
   Realty stocks have consistently outperformed, supported by rising demand in the residential and commercial segments. Analysts expect this trend to continue as the festive season boosts sales momentum.
3. Media and Telecom:
   Underperforming sectors like media and telecom are facing short-term profit booking. However, structural tailwinds such as digital transformation and 5G rollout could revive these sectors in the medium term.
4. Energy and Power:
   The power sector’s subdued performance could be a result of muted growth in electricity demand. Analysts suggest watching for policy measures to reignite growth in renewable and conventional energy segments.

Key Market Expectations for December 11

While the market remains in a consolidation phase, several factors will influence trading sentiment on December 11:

• Global Developments: Continued focus on China’s policy moves and their ripple effects on global markets.
• Domestic Factors: Any updates on government policy measures, particularly those related to infrastructure and banking reforms, could provide fresh impetus.
• Technical Levels: Sustaining above the 24,550 support zone will be crucial for the Nifty, while a breakout above 24,800 could set the stage for a rally toward 24,850 or beyond.

Final Remarks

The Indian markets are currently balancing between global tailwinds and domestic uncertainties. The Nifty’s flat performance on December 10 reflects a phase of consolidation, with strong support at lower levels offering a cushion.

While sectors like IT, realty, and PSU banks continue to drive gains, laggards such as media and telecom face near-term challenges.

Looking ahead, the market is likely to remain range-bound in the short term, with 24,500-24,550 acting as a solid support base.

A breach of the 24,800 resistance could spark fresh buying momentum, paving the way for higher levels.

Investors are advised to focus on fundamentally strong sectors and remain cautious about external risks, particularly the outcomes of global policy changes.