Sensex Down 1,064 Points, Nifty at 24,336; Tomorrow Nifty Prediction
Tomorrow Nifty Prediction
Sensex and Nifty Close Over 1% Lower: Market Prediction for December 18
Market Overview: The Indian equity markets experienced significant losses on December 17, marking the second consecutive day of negative trading.
The Sensex and Nifty indices closed down more than 1%, signaling a pronounced shift in investor sentiment.
The sharp decline came amid weak global cues, concerns over India’s growing trade deficit, and volatility in the currency markets, which triggered panic selling in domestic equities.
By the close of the trading session, the Sensex stood at 80,684.45, a drop of 1,064.12 points or 1.30%. The Nifty ended the day at 24,336, down by 332.25 points or 1.35%.
On the broader market front, there were 1,497 advancing stocks, but the number of declining stocks was significantly higher at 2,360. Only 85 stocks ended the day unchanged, suggesting a broad-based weakness in the market.
The midcap and smallcap indices, which had seen a promising start to the day, also faced selling pressure as the session progressed.
Both the BSE Midcap and Smallcap indices ended the day with losses of around 0.5%, reflecting the overall risk-off sentiment prevailing in the market.
Sectoral Performance
The day’s decline was broad-based across sectors, with several key sectors registering notable losses.
Among the hardest-hit were PSU banks and metals, which saw the biggest declines. These sectors, often considered bellwethers of the economy, faced significant selling pressure due to concerns over economic growth and the financial health of public sector banks.
Auto, banking, energy, metal, and oil and gas stocks all witnessed a drop of around 1%, reflecting the widespread weakness across the market.
The auto sector, which had been showing resilience in recent weeks, succumbed to the broader market downturn, as investors grew wary of slowing demand and higher input costs.
Similarly, the banking sector faced headwinds amid concerns over rising non-performing assets (NPAs) and the pressure on interest margins due to potential rate hikes.
The energy sector, which had shown some recovery post the global crude oil price surge, also faced losses, with market participants wary of the impact of rising input costs and global inflationary pressures on domestic energy consumption.
Similarly, stocks in the oil and gas sector were affected by the fluctuating prices of crude oil and natural gas, as well as the challenges faced by state-run companies in managing subsidies and price controls.
Despite the broad-based sell-off, there were a few exceptions. Cipla stood out as the only notable gainer on the Nifty index, bucking the trend and closing in the green.
The pharmaceutical sector, buoyed by expectations of sustained demand for healthcare products and medicines, has shown resilience even amid broader market downturns.
Stock Performance
Among the biggest losers on the Nifty were Shriram Finance, Bharti Airtel, Grasim Industries, Hero MotoCorp, and JSW Steel.
These stocks faced significant selling pressure due to a combination of weak earnings expectations, global economic headwinds, and sector-specific challenges.
Shriram Finance, a prominent player in the non-banking financial sector, saw its stock price fall on concerns over tightening liquidity conditions and higher borrowing costs.
Bharti Airtel, despite being one of India’s largest telecom providers, came under pressure amid concerns over potential regulatory challenges and the rising cost of acquiring 5G spectrum.
Grasim Industries, a key player in the cement and chemical industries, faced losses due to rising raw material costs and concerns about a slowdown in the construction sector.
Hero MotoCorp, a leader in India’s two-wheeler market, was impacted by fears of demand stagnation and increased competition in the domestic market.
Finally, JSW Steel faced selling pressure as the metal sector continued to be weighed down by global economic uncertainties, with investors concerned about a potential slowdown in demand for steel in key markets like China.
On the other hand, Cipla, the only gain on the Nifty, stood out as a defensive stock in a market under pressure.
The company’s strong fundamentals, coupled with sustained growth in the pharmaceutical sector, have continued to attract investors seeking stability amid market volatility.
Market Sentiment and Technical Outlook
The market sentiment on December 17 was overwhelmingly negative, with bears firmly in control throughout the trading session.
The indices experienced a significant downward move from the opening bell, with the Nifty breaching important support levels.
By the end of the session, the Nifty had closed at 24,336, down 332.25 points, after dipping below the 24,500-24,800 range, which had previously served as a key support zone.
Aditya Gaggar, Director at Progressive Shares, observed that the session was dominated by bearish market participants.
He noted that mid and small-cap stocks performed better than the frontline indices, though they too lost momentum as the day progressed.
From a technical standpoint, Gaggar highlighted the breach of the 24,500-24,800 range on the downside, suggesting that the market could see further downside risk in the near term.
The 24,270-24,300 zone is now seen as a critical support level for the Nifty. A sustained break below this zone could lead to a deeper correction, with the next key support level seen at 24,100.
On the upside, resistance for the Nifty is expected at around 24,600, which could act as a barrier for any short-term recovery.
External Factors and Investor Sentiment
Prashant Tapase of Mehta Equities pointed to weak Asian market cues as a key factor in driving down sentiment in India.
The broader global economic environment, particularly concerns over slowing growth in major economies, has led to a cautious outlook in the market.
In addition to global cues, India’s record-high trade deficit in November, coupled with the depreciation of the rupee, added to the prevailing uncertainty, prompting domestic investors to pare down their equity holdings.
The rupee’s decline to new lows against the US dollar, coupled with concerns over widening fiscal and current account deficits, has added to the market’s volatility.
As a result, panic selling has become more prevalent, particularly in export-oriented sectors like IT and metals.
Market Prediction for December 18
Looking ahead to December 18, the market is likely to remain in a cautious and volatile mode. The weak trend is expected to continue in the short term, with investors focusing on key economic data and global cues.
The outcome of the upcoming US Federal Open Market Committee (FOMC) meeting will be closely watched, as any signals of tighter monetary policy could add further pressure on global risk assets, including Indian equities.
Investors are advised to closely monitor key support and resistance levels on the Nifty, with particular attention to the 24,270-24,300 support zone.
If the index breaks below these levels, a larger correction could be on the cards. On the upside, resistance at 24,600 will be a crucial level to watch.
In the short term, cautious market participants should consider focusing on defensive sectors like pharmaceuticals and consumer staples, which tend to weather market volatility better than cyclical sectors.
However, in the face of uncertain global and domestic economic conditions, investors should remain vigilant and prepared for potential volatility in the coming days.
The outlook for the Indian equity market in the near term remains clouded by both domestic and global risks, and investors should brace for a bumpy ride as the year draws to a close.
