Sensex Gain 498 Points, Nifty at 23,753; Tomorrow Nifty Prediction
Tomorrow Nifty Prediction
Stock Market Update: A Positive Close on December 23, 2024—What to Expect on December 24
The Indian stock market saw a positive rebound on December 23, after enduring its sharpest weekly decline in two years.
With a solid recovery, the benchmark indices ended the day in the green, breaking a five-day losing streak and providing a sense of optimism heading into the last trading day before the Christmas holidays.
The Nifty closed near the 23,750 level, while the Sensex surged by 498.58 points, or 0.64%, to settle at 78,540.17.
Meanwhile, the Nifty rose by 165.95 points, or 0.70%, closing at 23,753.45. This rally was led by strong performances in the realty, banking, and metal sectors, showcasing that the market could be poised for further movement if favorable conditions continue.
Market Momentum Driven by Strong Sectoral Performances
The market’s recovery on December 23 was largely fueled by positive global cues and steady buying across a range of sectors throughout the day.
Despite a mid-session dip as profit-booking took place, the indices regained their strength and closed in the green.
The Nifty saw significant gains thanks to contributions from a number of key stocks, with JSW Steel, ITC, Hindalco Industries, IndusInd Bank, and Trent among the top performers.
On the downside, stocks such as Hero MotoCorp, Maruti Suzuki, Nestle India, HCL Technologies, and Bajaj Finserv saw declines.
According to Aditya Gaggar, Director at Progressive Shares, the Indian stock markets began the session strongly, propelled by a bullish cypher pattern, signaling an early indication of upward movement.
However, there was a mid-session reversal, with the index losing some of its earlier gains, ultimately closing with a modest gain of 165.95 points at 23,753.45.
Among the sectors, real estate led the charge, followed closely by the PSU Banks and the Bank Nifty index.
The realty sector, in particular, has been attracting attention due to robust demand and potential upside from government initiatives in the housing and infrastructure segments.
On the flip side, sectors such as media and automobiles faced selling pressure, with declines seen in stocks like Maruti Suzuki, which has been struggling with slowing sales in recent quarters.
Profit Booking and Broader Market Performance
While the overall market saw a recovery, the broader market showed some divergence. Mid-cap stocks managed to retain their ground, buoyed by solid earnings from some high-growth companies.
However, small-cap stocks faced profit-booking and closed in the red, reflecting concerns over stretched valuations in certain smaller stocks.
This divide between mid-caps and small-caps versus large-cap stocks may indicate some caution among investors, particularly as the market struggles to find a clear direction following last week’s sharp declines.
Despite the mixed performance in the broader market, the Nifty’s daily chart displayed a bullish harami cross candlestick pattern.
This formation is often viewed as a potential signal of trend reversal, suggesting that the market could be entering a period of upward momentum, provided key technical levels are breached.
A decisive move above the 23,850–24,000 range would likely confirm the reversal, setting the stage for further gains.
On the downside, the 23,600 level continues to act as a strong support zone, with any significant breach of this level potentially signaling a deeper correction.
Large-Cap Valuations and Potential for Limited Decline
Ajit Mishra, Vice President at Religare Broking, commented that the gains on December 23 may appear as a short-term relief rally, especially considering that the market had lost significant ground in the previous week.
While investor sentiment remains somewhat subdued, Mishra emphasized that oversold stocks, particularly large-cap names like HDFC Bank and Reliance, tend to attract buying interest.
These heavyweights hold considerable weight in the Nifty and often have a larger impact on index movements than smaller stocks, which gives them an edge in the current environment.
However, Mishra also cautioned that maintaining this upward momentum could prove challenging, as broader market sentiment remains under pressure.
He further noted that large-cap stocks are relatively attractively priced at present, with 28 out of the 50 Nifty stocks still trading below their long-term averages.
This suggests that there is limited downside potential for the large-cap segment in the short to medium term, providing some cushion against further declines.
Favorable technical indicators, such as the bullish candlestick patterns forming on the charts, also support this outlook.
Investors who are selective about the stocks they choose in the large-cap space may find opportunities for continued growth.
Mishra also pointed out that mid- and small-cap stocks have been performing well in recent sessions, reflecting the strength in certain sectors and stock-specific growth stories.
While small- and mid-cap stocks can be volatile, there are select stocks within these segments that are well-positioned for further outperformance, especially those that have strong earnings growth or favorable business outlooks.
Investors looking for higher returns may find such stocks appealing, though the inherent risks are higher compared to large-cap stocks.
Key Levels to Watch for Nifty and Market Sentiment
For the Nifty, the key resistance zone is between 23,850 and 24,000. A decisive move above this level would confirm the bullish reversal and could lead to further gains, with the next target possibly being 24,200–24,300.
On the downside, 23,600 continues to act as strong support, and a break below this level would signal a deeper correction, potentially retesting the lows seen in previous sessions.
Another important level to watch is the 50-day moving average, which can act as both support and resistance depending on the direction of the market.
Currently, the 50-day moving average is just above the 23,600 mark, adding further significance to this level as a crucial point for determining the market’s next direction.
Market Prediction for December 24 and Beyond
Looking ahead to December 24, market participants will be closely monitoring global cues, particularly from the US and other major economies, as well as sector-specific trends.
Given that December 24 is often a day with lighter trading volumes, volatility could be higher, and investors should be cautious of potential market swings.
Additionally, many investors may be in holiday mode, leading to less activity in the market, which can sometimes exacerbate price movements.
In conclusion, the Indian stock market closed on a positive note on December 23, recovering from recent losses and setting the stage for further movement.
While there is potential for continued gains, especially in large-cap stocks, the broader market’s mixed performance suggests that caution may still be warranted.
Key levels for the Nifty to watch are 23,850–24,000 on the upside and 23,600 on the downside. How the market behaves near these levels will give investors clearer signals for the near term.
As always, investors should remain vigilant and selective, focusing on stocks and sectors that show solid earnings support and favorable technicals as we approach the new year.
