Sensex Down 200 Points, Nifty at 24,619; Tomorrow Nifty Prediction

Tomorrow Nifty Prediction

Market Closes in Red: What to Expect on December 10

Indian equity markets experienced a subdued trading session on December 9, with both the Sensex and Nifty closing in the red.

The decline in the broader indices reflected cautious investor sentiment, continuing a trend of consolidation after last week’s rally.

The Sensex dropped by 200.66 points, or 0.25%, to close at 81,508.46, while the Nifty fell by 58.80 points, or 0.24%, ending at 24,619.00.

The Nifty’s movement remained in a narrow range around the 24,600 mark for the majority of the session, and by the close, it was unable to break past key resistance levels.

On the broader market front, there was a mixed performance. The market breadth revealed that 2,222 stocks advanced, 1,692 stocks declined, and 151 stocks remained unchanged.

While the overall sentiment remained weak, some individual stocks stood out. Stocks like Tata Steel, L&T, SBI Life Insurance, Wipro, and BPCL managed to close in the green, driven by sector-specific tailwinds.

However, heavyweight stocks like Tata Consumer Products, HUL, Tata Motors, Axis Bank, and Nestle India were among the major laggards, pulling the indices lower.

Sector Performance:

Sectoral performance on December 9 also showed a mixed picture. The FMCG and media sectors faced the most significant declines, with both dropping by around 2%.

The FMCG sector, in particular, saw pressure due to weak consumer sentiment and concerns over rising input costs, especially amid global inflationary pressures.

On the other hand, the media sector struggled amid ongoing challenges in advertisement revenue growth and evolving consumer behavior.

The pharma, PSU banks, auto, and energy sectors also showed weakness, declining by 0.5%. While the pharma sector is often considered a defensive play, it has been grappling with pricing pressures in key markets such as the US.

Similarly, the PSU banks are facing margin compression due to a combination of rising funding costs and lower loan growth.

Despite the overall downtrend, certain sectors bucked the broader market weakness. The metal index rose by 0.6%, driven by strong performances in companies like Tata Steel and JSW Steel.

The capital goods sector was another positive performer, rising by 1%. This could be attributed to the ongoing infrastructure push by the government and a revival in capital expenditure across various sectors.

Mid and small-cap stocks, as usual, continued to outperform their large-cap counterparts. The BSE midcap index rose by 0.3%, while the smallcap index increased by 0.5%.

These segments continue to attract investor attention due to their higher growth potential and attractive valuations relative to larger companies.

Market Sentiment and Technical Analysis:

Looking at the technical indicators, the market’s closing on December 9 presented a mixed picture. The formation of a “gravestone doji” candlestick pattern indicates a market that opened higher but failed to sustain those gains, closing near the low of the day.

This pattern typically signals indecision and possible bearish sentiment in the near term, though it is not always definitive of a trend reversal.

Traders and analysts will be keen to see whether the market can stabilize above key levels or if it will continue to slide.

In terms of levels, Nifty faces resistance at 24,850, while the next major resistance is seen at 25,400. On the downside, immediate support is at 24,540, with a stronger support zone around 24,200.

Given the recent market pattern, analysts expect a range-bound movement unless there is a significant catalyst that either strengthens or weakens market sentiment.

If the market breaks below 24,540, it could signal a deeper correction, while a move above 24,850 might provide an opportunity for a rally towards higher levels.

Commentary from Market Experts:

Aditya Gaggar, Director at Progressive Shares, noted that after the previous week’s strong rally, the market entered a consolidation phase, marked by narrow trading ranges.

Despite a sluggish start, the Nifty managed to hold above 24,600 for most of the day but eventually closed lower.

Gaggar pointed out that metal stocks, led by Tata Steel and JSW Steel, were among the major gainers, benefiting from an uptick in commodity prices and positive global cues.

On the other hand, FMCG and media stocks were the key losers, reflecting the challenges these sectors are facing amid rising inflation and muted demand.

Meanwhile, Prashant Tapase of Mehta Equities highlighted that investor enthusiasm has waned after last week’s rally, and many participants are now adopting a cautious stance.

Tapase emphasized that the market is in a holding pattern, with most of the session spent in the negative zone.

A key focus for the coming week is the release of crucial economic data, particularly the Index of Industrial Production (IIP) and inflation numbers.

These data points will be pivotal in determining the Reserve Bank of India’s (RBI) future monetary policy stance, especially regarding interest rate cuts.

Economic Data and Market Predictions:

The economic data slated for release this week will likely play a crucial role in shaping the market’s direction. Investors are particularly focused on the IIP and inflation numbers.

The IIP data will provide insights into the health of the industrial sector, while inflation figures will reveal the extent to which price pressures persist in the economy.

If inflation continues to remain elevated, it could signal that the RBI may delay any potential interest rate cuts. This could dampen investor sentiment, particularly in interest-rate sensitive sectors such as real estate and autos.

Conversely, if inflation shows signs of moderation, the RBI may be in a position to ease policy, which could provide a boost to the markets.

The market will also be closely watching global cues, particularly any shifts in US monetary policy and global commodity prices, as these have a direct impact on domestic markets.

Market Prediction for December 10:

Heading into December 10, the Indian stock market is likely to remain in a cautious mode. The key data points this week will likely determine whether the market can regain its upward momentum or if it will face further consolidation or pullbacks.

Investors will closely monitor IIP and inflation data, which could act as catalysts for a short-term market move.

If inflation data is higher than expected, it may dampen market sentiment, but if the data shows signs of easing, there could be a renewed optimism in the market.

At the same time, sector-specific performance is likely to continue to diverge. Investors might look for opportunities in the metal, capital goods, and mid-cap segments, while staying cautious in FMCG and media stocks, which are facing headwinds.

Overall, the market remains in a wait-and-watch mode, with a strong focus on economic data and global developments over the coming week.

Final Remarks:

In summary, after a day of negative closing on December 9, the Indian stock market appears poised for a cautious, range-bound movement, with key economic data on the horizon.

The IIP and inflation data, expected later this week, will be the key drivers of market sentiment, potentially determining the RBI’s future monetary policy actions.

With mixed sector performance and cautious investor sentiment, December 10 could see further consolidation in the market unless the data provides a clear direction for future movements.

Investors are advised to stay nimble and monitor developments closely to make informed decisions.