Sensex Down 109 Points, Nifty at 23,644; Tomorrow Nifty Prediction
Tomorrow Nifty Prediction
Market Recap: A Quiet Close on December 31 – What to Expect for January 1
Market Overview: The Indian stock market ended on a subdued note on December 31, marking a flat close as traders opted for caution ahead of the new year.
The Sensex closed marginally lower by 21.66 points, or 0.03%, finishing at 78,226.47. In contrast, the Nifty index eked out a small gain, advancing by 13.25 points, or 0.06%, to close at 23,658.15.
The Nifty Bank, however, struggled, falling 91 points to settle at 50,860, reflecting continued weakness in the banking sector.
On a positive note, Midcap stocks gained 10 points, closing at 57,199, underlining the resilience of smaller stocks in a market that has shown signs of volatility.
Despite the flat nature of the day’s close, the market breadth was positive. A total of 2,120 stocks advanced during the session, compared to 1,370 decliners, with 64 stocks remaining unchanged.
Among the 30 Sensex stocks, 16 saw gains, while 26 out of 50 Nifty stocks were in the green. However, the Nifty Bank index showed weakness, with only 4 of its 12 constituent stocks closing in the positive.
This reflects ongoing concerns within the banking sector, particularly in the mid- and small-cap banking stocks, which continue to be under pressure despite the market’s overall performance.
Market Technicals:
From a technical perspective, the market is showing signs of consolidation after recent volatility. On the daily chart, a small positive candlestick formed, characterized by a minor range, indicating a potential counter-attack by the bulls following an attempted downside breakout earlier in the week.
This small candle is a sign of resilience after an initial drop, suggesting that the market may not be ready for a sharp decline just yet.
The Nifty had briefly dipped below the crucial 200-day Exponential Moving Average (EMA) on Monday, which caused some concern among market participants.
However, it failed to show any significant follow-through weakness on Tuesday, bouncing back from a low of 23,460, which indicates that the downside may be limited.
The fact that the Nifty regained ground after testing lower levels suggests that the market is still in a broad consolidation phase rather than entering a sustained downtrend.
Moreover, the weekly chart shows a small red candle positioned alongside a similar green candle from the previous week.
This pattern suggests that the market could remain range-bound, continuing to fluctuate within a defined trading range. It could signal a period of indecisiveness, with the market waiting for fresh catalysts to drive the next move.
Looking ahead, Nifty is likely to trade within a range of 23,500 to 24,000 in the near term, with key resistance at the 24,000 level.
A move above this level could trigger further buying interest, potentially driving the index higher. On the downside, support is expected at the 23,500 level, with a breakdown below this level possibly opening the door for a correction.
The market is expected to exhibit higher volatility as we enter the new year, with short-term swings likely as traders position themselves for the first quarter of 2025.
2024 Market Review: Strong Year for Indian Equities
2024 has been a year of solid growth for the Indian stock market, with both the Nifty and Sensex closing higher for the ninth consecutive year.
This marks a positive sign for Indian equities, reflecting the resilience of the market in the face of global uncertainties and domestic challenges.
The Nifty posted a gain of around 9% in 2024, while the Sensex rose by about 8%. This consistent performance underscores the strong underlying growth of the Indian economy and its stock market.
However, it was the mid-cap and small-cap stocks that truly outperformed, with the Nifty Midcap and Nifty Smallcap indices surging by over 20%.
These stocks have demonstrated significant growth potential, which has attracted both domestic and international investors looking for higher returns.
Within the broader market, several sectors performed exceptionally well in 2024. The Pharma sector emerged as one of the top performers, registering a spectacular 39% gain, with the healthcare segment leading the charge with a remarkable 41% increase.
Real Estate also had a solid year, gaining 33%, driven by renewed demand in residential and commercial properties.
The Pharma sector’s outperformance is particularly notable as global demand for healthcare products and services remains strong, while the real estate boom was fueled by post-pandemic recovery and government initiatives.
On the flip side, the Nifty Media sector had a challenging year, falling by around 25%. This underperformance reflects the ongoing challenges facing traditional media businesses, particularly with the rise of digital platforms and changing consumer preferences.
Additionally, the Nifty Bank index underperformed the broader market, posting a modest gain of 5% for the year.
While the banking sector faced headwinds due to concerns about asset quality and rising interest rates, it still managed to deliver positive returns.
In the individual stock space, Trent, M&M, and Bharti Airtel stood out as top performers in the Nifty 50, benefiting from strong growth in consumer demand and improved operational efficiencies.
On the other hand, stocks like Asian Paints and IndusInd Bank struggled, largely due to sector-specific challenges.
In the mid-cap space, stocks such as Dixon Technologies, BSE Limited, OFSS, and RVNL saw impressive gains, reflecting the strong performance of industrials, technology, and infrastructure sectors.
Conversely, stocks like Vodafone Idea, AU Small Finance Bank, and Bandhan Bank experienced significant declines, weighed down by financial stress and regulatory issues.
What to Expect for January 1: Range-Bound Action Likely
As the market enters the first trading day of 2025, investors and traders are likely to focus on key technical levels and sectoral trends. According to Nagaraj Shetty of HDFC Securities, Tuesday’s bounce back after an early session dip could be an early sign of bullish momentum.
After initially opening on a negative note, the market showed a sharp recovery from the day’s low, indicating that buying interest is still present in the market.
The bulls appear to be testing the waters after the previous day’s weakness, and this may continue in the near term.
Looking ahead to January 1, the Nifty is expected to trade within a broad range of 23,500 to 24,000, with a possible move towards the 24,000 level if the bullish momentum continues.
A sustained move above 24,000 would likely trigger further buying and could propel the index to higher levels.
On the downside, the 23,500 level remains crucial support. If the market fails to hold above this level, it may lead to short-term corrections, and traders may focus on stock-specific opportunities in sectors such as Pharma, Real Estate, and IT, which have been showing strength.
Investors should remain cautious but alert, as the early part of the year often brings volatility. Sectoral rotations, economic data releases, and global cues will be the key drivers of market sentiment in the coming weeks.
In conclusion, January 1 could see the market range-bound between 23,500 and 24,000, with potential for bullish continuation if 24,000 is surpassed.
However, investors should be prepared for occasional volatility and sector-specific movements, as the market digests the effects of 2024 and positions itself for 2025.
