Market Savera - 09/12/2024

Stock Market Updates

Indian Market Summary

Indian stocks had their strongest weekly performance since June, primarily driven by financial stocks after the central bank reduced the cash reserve ratio (CRR) requirements for banks, effectively loosening monetary conditions.

The uptrend was driven by positive momentum in global markets and an RBI policy announcement that aligned with market expectations. The RBI conveyed optimism regarding robust demand and industrial growth, driven by higher government spending and strengthening rural demand. However, persistently high inflation has postponed the likelihood of a rate cut until at least February 2025. The central bank's decision to downgrade its GDP forecast for FY25 from 7.2% to 6.6% and raise the inflation target from 4.5% to 4.8% cast a shadow over investor sentiment.

Foreign Portfolio Investors (FPIs) have invested approximately ₹25,000 crore in Indian markets during the first week of December, marking a significant turnaround from their recent behaviour over the past two months, during which they aggressively sold Indian stocks totalling more than ₹1.5 lakh crore.

Global market summary

Major US indexes ended higher in a week in anticipation of potential interest rate cuts from the Federal Reserve, contributing to broad sector gains and strong confidence in market direction. Russell 2000 Index declined after back-to-back weeks of outperformance versus its larger-cap peers. The NASDAQ rose more than 3%, posting its third weekly gain in a row and joining the S&P 500 in record territory.

The U.S. economy has sustained strong GDP growth despite the dimming labour market picture, indicating that productivity growth has been robust.

Bitcoin surpassed $100K, boosted by the incoming administration’s appointment of a cryptocurrency advocate as head of the SEC.

Political opposition-initiated impeachment proceedings against South Korea’s President Yoon Suk Yeol after he declared martial law, which lasted six hours before being lifted. The declaration prompted protests, while the Korea Stock Exchange Index fell.

Market Outlook - 25000 In Sight

The rally this week saw the Nifty breaking out of the crucial resistances of 24355, thereby reversing the recent short-term downtrend. In the process, Nifty also closed above the 50 day SMA towards the end of the week. It was the third consecutive week of gains for the Nifty.

FPIs are gradually covering their short positions in the index futures, and now their net short positions are lowest in the last two months, gradually inching towards the neutral zone.

Nifty is headed towards 25000 mark this week, and derivative cues suggest that 25000-25200 range will act as short-term resistance zone.

In fresh developments, Syrian rebel forces entered the capital, Damascus, facing no resistance from the military amid reports that President Bashar al-Assad has fled the country – Now Syria gets added to already muddled geo-political environment across the globe and these developments will keep many investors on the tenterhooks for days to come.