Sensex Down 384 Points, Nifty at 24,668; Tomorrow Nifty Prediction

Tomorrow Nifty Prediction

Nifty Closes Below 24,700: What to Expect on December 17

Market Recap: December 16
On December 16, Indian equity markets experienced a day of consolidation and correction, with both the benchmark indices closing in the red.

The Nifty index slipped below the crucial 24,700 level, signaling a slight pullback after a series of bullish movements.

The BSE Sensex finished at 81,748.57, down 384.55 points or 0.47%, while the Nifty ended the session at 24,668.25, a loss of 100.05 points or 0.40%.

Despite the negative closing for the major indices, mid and small-cap stocks showed resilience, outperforming the benchmark indices with gains of over 0.60%.

Sectoral and Stock Performance

Sector-wise Performance
The day saw mixed sectoral performance. The BSE Realty index emerged as the top performer, gaining a robust 3%, driven by positive sentiment in the real estate sector.

This surge in realty stocks can be attributed to renewed optimism about economic recovery and government spending on infrastructure.

Following closely were the Media and PSU Banks sectors, which rose by 1.5% and 0.5%, respectively.

On the flip side, the Information Technology (IT), Metals, and Oil & Gas sectors faced the brunt of the market correction.

These sectors ended the day with declines ranging from 0.5% to 1%. The IT sector, which had witnessed a significant rally in recent sessions, saw some profit-booking on December 16, contributing to its underperformance.

Stock-specific Moves
Among Nifty stocks, the biggest losers included Titan Company, TCS, Hindalco Industries, Adani Ports, and BPCL, which all experienced declines due to broader market weakness and sectoral underperformance.

These stocks have been part of the broader correction, particularly in sectors like metals, energy, and IT.

On the other hand, a few stocks managed to buck the trend and posted gains. Dr. Reddy’s Labs, IndusInd Bank, Bajaj Finance, Power Grid, and HDFC Life were among the top gainers on the Nifty.

The strong performance of these stocks, particularly in the pharma and banking sectors, helped offset some of the losses in the broader index.

Broader Market: Mid and Small-Caps Lead

The broader market showed a different picture altogether. While the benchmark indices traded lower, mid-cap and small-cap stocks continued their upward trajectory, gaining 0.60% each.

This outperformance in the mid and small-cap segments signals an increasing investor appetite for riskier assets, possibly driven by a belief in continued economic recovery and growth opportunities outside the large-cap space.

This trend is likely to continue in the near term, as investors look for value in these segments.

The BSE Midcap and Smallcap indices gained 0.5% each, a notable feat given the overall market’s negative sentiment.

Investors’ interest in the broader market is also reflected in the performance of smaller stocks, which are often seen as undervalued compared to their larger counterparts.

Market Sentiment: A Cautious Pause in a Bullish Trend

Aditya Gaggar, Director at Progressive Shares, observed that while the Indian markets started the week sluggishly and showed some weakness on December 16, the market remains in a generally positive phase.

He highlighted that the Nifty slipped due to a correction in select heavyweight stocks, but despite this, the index managed to recover from its intra-day lows, closing just 100 points down.

According to Gaggar, this represents a brief consolidation or pause in an otherwise bullish market environment.

Gaggar also pointed out that select sectors such as Realty and Media have continued to show strong upward momentum, reflecting resilience in certain pockets of the market. However, profit-booking in sectors like IT and Metals was evident, which dampened overall market sentiment.

The realty sector’s strong performance came as a surprise, given the broader market correction, indicating that there are still pockets of opportunity driven by sector-specific factors.

Technical Outlook: Range-bound Market

From a technical perspective, Jatin Gedia, Technical Research Analyst at Mirae Asset Sharekhan, noted that Nifty opened flat on December 16 and then traded with a negative bias throughout the day, closing lower by 100 points.

However, Gedia stressed that this move is part of a larger pattern of consolidation in the market. Despite the decline, he sees this as a temporary phase in an overall bullish environment, and the Nifty index is likely to stabilize in a limited range before resuming its upward movement.

Gedia further mentioned that the trading range for the Nifty has now expanded to 24,500-24,800, and a breakout on either side of this range would provide crucial insights into the market’s next direction.

On the upside, Gedia sees a short-term target of 25,125, while the big support for the Nifty remains around the 24,500-24,550 zone.

A pullback toward this support zone could be an attractive buying opportunity, particularly for traders looking to capitalize on short-term price swings.

Key Levels to Watch:

• Support Zone: The key support levels for Nifty are seen around 24,500-24,550. A dip towards this support range is likely to be viewed as a buying opportunity, especially if broader market sentiment remains positive.
• Resistance Zone: On the upside, the immediate resistance for Nifty is expected around 24,800. A breakout above this level could lead to a test of higher levels, potentially pushing the index towards the short-term target of 25,125.

Market Strategy: For traders and investors, the current market offers a range-bound opportunity. The 24,500-24,800 range will act as the key trading zone for Nifty in the short term.

A breakout on either side of this range will be crucial in determining the next leg of the market’s movement.

While there is potential for further upside if the market clears resistance, traders should remain cautious around the support zone.

The mid and small-cap stocks, which have outperformed recently, continue to offer pockets of opportunity for selective investments, particularly in sectors like Realty, Media, and Pharma.

Final Remarks: What to Expect on December 17

The Indian stock market is currently in a consolidation phase, with Nifty slipping below 24,700 on December 16, but the broader bullish trend remains intact.

Key levels to watch are 24,500-24,800, with a breakout above or below these levels likely to set the market’s direction for the coming sessions.

Despite the correction in large-cap stocks, the resilience of mid and small-cap stocks suggests that there are still opportunities in the market, particularly in specific sectors.

For December 17, investors should focus on monitoring key support and resistance levels, as well as sectoral trends.

While broader market sentiment remains cautious, individual stock selection and a focus on mid and small-cap opportunities could offer favorable returns in the near term.