Closing Bell: Sensex slumps 450 pts in penultimate trading session of 2024, Nifty ends below 23,650

Benchmark indices ended the week’s first trading session in the red, with the BSE Sensex shedding 450.94 points (0.57%) to close at 78,248.13 and the NSE Nifty 50 falling 168.50 points (0.71%) to settle at 23,644.90. The day clearly belonged to the bears, as markets grappled with thin year-end volumes, a weakening rupee, and sustained foreign institutional investor (FII) outflows. The rupee's slide toward the 86-per-dollar mark has further dampened the appeal of Indian equities for foreign institutional investors (FIIs), as returns in dollar terms continue to shrink. Meanwhile, the US Dollar Index (DXY) climbed to 108.04, underscoring the greenback's sustained strength. In domestic currency trading, the rupee weakened slightly, trading at 85.5675 against the dollar. As 2024 nears its close, market sentiment remains fragile, with volatility taking centre stage. Key upcoming data, including December quarter earnings, are expected to provide much-needed direction to the markets.

Prevailing subdued sentiment on account of FIIs selling and a strengthening dollar continued to drag the market. While IT & pharma gained as investors continued to bet on defensive stocks to prevent short-term volatility. Concerns over high valuation are impacting the broad market. The upcoming policy announcements in the US and domestic Q3 earnings will be keenly watched by investors.

After four days of narrow move, Nifty resumed its downtrend by falling 168 points or 0.71%, to close at 23644. Nifty attempted to surpass last week’s high of 23938 but failed to do so. Nifty made an intraday high of 23915 and fell more than 300 points towards the end. NSE cash market volumes were higher by 77% as compared to yesterday on the back of quarterly rejig of Nifty Indices.

Divergent movement was seen in the Midcap and smallcap Indices where Nifty Midcap 100 Index rose by 0.37% while Nifty small cap Index fell by 0.62%. Declining shares outnumbered the advancing shares for the ninth consecutive day where advance decline ratio stood at 0.57 on BSE.

Amongst the sectoral Indices, Nifty Healthcare, Pharma, and IT gained the most while Nifty Media, Reality and Metals were major losers. Asian markets fell in low volumes as investors trimmed positions amid uncertainty heading into year-end

The broader range for the Nifty has been 23500-24000 for last 5 trading sessions and either side breakout would decide the further trend. However, positional trend remains down as Nifty is currently placed below key moving averages.

After showing a narrow range movement in the last four sessions, Nifty slipped into weakness on Monday and closed the day lower by 168 points. Nifty opened on a negative note and slipped into weakness soon after the opening. It later made an attempt of upside bounce in the early-mid part of the session, but the upside bounce has faltered and the market slipped into sharp weakness in the mid to later part of the session.

A reasonable negative candle was formed on the daily chart with upper shadow. Technically, this market action indicates an attempt of downside breakout of the range movement. This is not a good sign and signal more weakness ahead.

The crucial support of 200-day EMA has been violated again at 23700 levels amidst choppy movement and the opening downside gap of 19th December remains unfilled after seven sessions of its formation. This said unfilled opening down gap could be considered as a bearish run-away gap, which is normally formed in the middle of a down trend. Hence, more decline could be instore.

The short-term trend of Nifty is down and the market is expected to slide down to 23500-23400 levels in the short term. Immediate resistance is at 23800 levels.

The market began the week on a volatile note, ending with a loss of over half a percent. After a flat opening, the Nifty gained ground in the first half but faced selling pressure in heavyweight stocks across sectors, reversing its trajectory. As a result, the Nifty closed near the day's low at 23,644.90.  On the sectoral front, most major sectors closed in the red, with realty, auto, and metal sectors leading the decline, while pharma was the sole exception. The broader indices showed a mixed trend, with the midcap index closing flat and the smallcap index losing nearly half a percent.

The Nifty is struggling to sustain above its long-term support zone, the 200-day exponential moving average (DEMA). Today’s decline signals potential for further downside, with a decisive break below 23,500 likely to confirm this trend, setting the next target at 23,250.  Sector-wise, only pharma and healthcare are maintaining consistent trends, while others present opportunities on both sides. Participants are advised to adjust their positions accordingly.

The rupee ended at a record low of 85.54/$, marginally weaker than Friday’s close of 85.53/$

Indian Rupee depreciated today on weak domestic markets and dollar demand from importers towards the end of the month. FII outflows and a surge in crude oil prices also weighed on the domestic currency. However, strong Asian currencies supported the Rupee at lower levels.

We expect Rupee to trade with a negative bias on strength in the US Dollar and month-end Dollar demand from importers and OMCs. Elevated crude oil prices and FII outflows may also put pressure on the local currency. However, any intervention by the RBI may support Rupee at lower levels. Traders may take cues from Chicago PMI and pending home sales data from the US. USDINR spot price is expected to trade in a range of Rs 85.30 to Rs 85.85.

Spot gold, after closing with a loss of 0.5% at $2620 on Friday is currently exchanging hands at $2616 as the US Dollar is a tad stronger. Gold closed steady on the weekly closing basis. Dollar is firmer despite lower yields.

Today’s US data include pending home sales (November).  Considering the fact that, of late, most of the US data have been disappointing, gold is expected to find good support into the dips, though Thin liquidity may lead to erratic moves as the year winds up.  Gold is likely to get support from the ETF flows, too. Dip buying with a stop-loss below $2581 for a target of $2650/$2670 in the coming days is a preferred strategy.

Gold traded flat, remaining within the range of Rs 76,400–Rs 76,750 in MCX, while spot gold stayed between $2,610–$2,628 on Comex. With global markets entering the holiday period for New Year celebrations, trading volumes were thin, and market activity was subdued. In MCX, gold has immediate support near Rs 76,000, while resistance is seen around Rs 77,000. The sideways movement is likely to persist in the short term due to the limited participation during the festive season.

The Sensex dropped 450.94 points or 0.57 percent to close at 78,248.13, while the Nifty fell 168.50 points or 0.71 percent to settle at 23,644.90. Market breadth leaned negative, with 1,368 shares advancing, 2,460 shares declining, and 140 remaining unchanged.

Foreign institutional investor (FII) outflows, weak global cues, and a depreciating rupee dented sentiment. Most sectoral indices ended in the red, Leading the losses, the Nifty Auto index dropped nearly 2 percent, followed by the Nifty Bank index. Other sectors like energy, infrastructure, and IT, recorded losses, while pharma and information technology bucked the trend.

Adani Enterprises remained the top gainer on the Nifty, surging about 8 percent. Other gainers included Shriram Finance and HCL Tech. Among the losers, Hindalco was the worst hit, followed by Wipro, Tata Motors, Hero Motocorp, and JSW Steel.

Suzlon Energy stock prices are currently trading at Rs 62.31, down by 1.49 percent from opening, as at 2:31 PM, Dec 30. This is following the Company’s announcement of its an income tax refund that is worth Rs 173 crore.  As of 2024, Suzlon Energy’s shares have gained over 60 percent despite a recent correction from its peak of Rs 86.

Suzlon Energy has successfully overturned a Rs 172.76 crore penalty imposed by the National Faceless Penalty Centre of the Income Tax Department. This favorable judgement from the Income Tax Appellate Tribunal ITAT was involving a penalty related to certain disallowances, including a claim of depreciation on goodwill for the financial year 2017.

The Sensex declined by 331.41 points, or 0.42 percent, to 78,367.66, while the Nifty dropped 114.65 points, or 0.48 percent, to 23,698.75. Market breadth remained negative, with 1,248 stocks advancing, 2,350 declining, and 113 remaining unchanged.

Adani Enterprises shares surged nearly 7 percent on December 30 to emerge as the top gainer on the list of Nifty 50 stocks. The sentiment for the stock bolstered after brokerage firm Ventura Securities assigned a price target of Rs 3,801 for the stock within a two-year time frame. The target price translates into an upside potential of nearly 58 percent from Friday's closing.

At 1.55 pm, shares of Adani Enterprises were trading nearly 7 percent higher at Rs 2,572.20 apiece on the NSE. The surge in the stock today was also supported by heavy trading volumes. As many as 51 lakh shares already changed hands so far, already much higher than the one month daily traded average of 28 lakh shares.

While the company's green H2 project has gone through a one-year delay, Ventura Securities believes that it sees a potential upside of nearly 26 percent in the stock, with a SOTP value of Rs 3,029 even without considering the value of the green H2 vertical.

The year gone by was especially active for the markets, with a flurry of triggers coming from the government, regulators and from the political front as well in the form of elections. Let's take a look at the key government-related activities and how they moved the markets in 2024.

SEBI cracks the whip

Markets regulator Securities and Exchange Board of India (SEBI) cracked the whip quite hard in 2024, taking decisive action against not only individuals and organisations, but also came out with decisions that impacted the entire securities ecosystem in India.

Of the two big moves SEBI undertook in 2024, the first was the stress test requirement. Mutual funds were asked to close the liquidity of a fund, so investors could assess how liquid their capital parked in these funds is. The sharp run-up in small-cap stocks caused huge mark-to-market gains, but due to the lower trading volumes, the markets regulator expressed concerns about the liquidity, in case a slew of investors decided to redeem their portfolios. Read More

Gold prices are likely to see continued consolidation this week amid lack of fresh triggers as major participants are still away due to new year holiday in the international market, while upside in the bullion limited due higher dollar that is trading near 108-levels. Some data in focus this week will the manufacturing PMI data from across regions.

After delivering negative returns to shareholders over the past year, Tata Steel shareholders could face further challenges due to operational issues plaguing its international business. The company faces a €27 million fine for environmental violations imposed by the Netherlands government on its operations at IJmuiden. Additionally, the Dutch government has threatened to potentially shut down operations if the company fails to undertake the necessary capital expenditure to address the violations.

Read more

Alkyl Amines shares fell on December 30 after the residue tank in the derivatives plant at the company's Pune plant in Maharashtra ruptured, resulting in serious burn injuries to the attending officer due to the hot content of the residue tank.

The officer succumbed to the injuries after being treated at Surya Burns Hospital in Pune. There could be a temporary disruption in operations at the affected plant. The company is taking all necessary steps to restore normal operations at the earliest. Assets at the affected plant are adequately insured, and the company is in the process of filing an insurance claim to cover the damage and losses.

Carraro India becomes the first public offer to debut at a discount to its issue price in over two months. Carraro India shares listed at a discount of nearly 8% at Rs 651 as against an issue price of Rs 704.

Friday's candle traced a long upper shadow with a high in the resistance zone that lies between 23880 - 24070 and settled near the session's lows, which clearly shows buyer rejection at the highs. Support remains inside the 23500 and 23640 areas. As before, a daily close above 24150 is needed for bulls to reassert themselves. Seasonally speaking and based on 25 years of data, the Nifty has risen 71% of the time in the last two days of the calendar year with average and median returns of 0.7% and 0.4%, respectively.

As investors leave 2024 behind and look forward to the New Year there will be more concerns than confidence, at least in the early days of 2025. The biggest concern for stock markets, globally, is uncertainty surrounding Trump 2.0. The concern is that since market valuations are high any negative news might cause corrections.

The resilience of the US economy continues to surprise. The lower-than-expected jobless claims have pushed the US 10-year bond yield to 4.62%. This will be a headwind for stock markets globally and particularly for emerging markets where FIIs might continue to sell. Risk-free yield of 4.62% from the safest asset class in the world will continue to lure FIIs to sell in emerging markets like India and move the money to US bonds.

In the recent market correction in India, IT and banking stocks have remained reasonably resilient, primarily due to their fair valuations. Investors should exercise caution as we move into the uncertainties of the New Year.

Global brokerage Morgan Stanley kicked off coverage on recently listed Zinka Logistics Solutions Ltd, giving it an underperform rating with a target price of Rs 450 per share. This indicates a downside potential of around 16 percent from the previous session's closing price.

While the brokerage recognizes Zinka's niche position and strong competitive advantages in a fragmented market, it believes the stock's recent rally, which is up 105 percent since its November 2024 listing, makes it less attractive at current levels. Read More

An incident of leak at Gujarat Fluorochemicals' Dahej plant on December 28 has resulted in four deaths, involving one employee and three contractual workers, the company said in a statement.

The mishap took place at the CMS-1 plant in Dahej, Gujarat, and was immediately isolated but the operations have been temporarily disrupted, said the company.

Shares of JSW Energy surged 6 percent on December 30, after a wholly-owned subsidiary of the firm JSW Neo Energy signed a definitive agreement to acquire O2 Power, a renewable energy platform jointly established by Swedish asset manager EQT Partners and Singapore’s Temasek Holdings. Brokerages were bullish on this acquisition, as it bolstered the energy player's growth outlook. The transaction values the platform at an enterprise valuation of Rs 12,468 crore ($1.47 billion), after adjusting for net current assets.

JSW Energy announced that O2 Power, a renewable platform with 4,696 MW capacity, will have 2,259 MW operational by June 2025, 1,463 MW under construction, and 974 MW in the pipeline for June 2027.

Indices traded marginally lower at pre-open, tracking weak global cues. The Sensex was down 54.99 points or 0.07 percent at 78,644.08, and the Nifty was down 28.50 points or 0.12 percent at 23,784.90

Shares of Senores Pharmaceuticals, Ventive Hospitality, and Carraro India are set to debut on Dalal Street today after collectively raising over Rs3,432 crore through their IPOs.

Senores Pharmaceuticals saw exceptional demand, with an overall subscription of 93.41 times, and its grey market premium (GMP) of Rs280-285 hints at a potential listing gain of over 73%. Ventive Hospitality was moderately subscribed at 9.80 times, with its GMP of Rs70 suggesting a listing pop of over 10%.

In contrast, Carraro India saw a muted response with a subscription of just 1.12 times, and its GMP remained negligible throughout the IPO journey, signaling limited listing gains.

The Indian rupee slumped 0.6% to a record low of 85.7437 per dollar on Friday, its sharpest single-day decline since February 2023. Month-end dollar demand from importers, coupled with concerns over India’s trade deficit and slowing economic growth, weighed heavily on the currency.

Despite being one of the world’s least volatile currencies, the rupee has consistently hit new lows this month, driven by the dollar's global strength. Market focus remains on the new central bank governor’s stance on foreign-exchange interventions, which could signal a shift toward greater currency volatility.

Gold prices on Friday dropped 0.6% to $2,617.75 an ounce in quiet holiday-week trading, erasing Thursday’s gains. Mixed US jobless data offered little to shift market expectations on Federal Reserve interest-rate cuts. While continuing unemployment claims rose to their highest in over three years, initial claims showed a slight decline, reflecting a cooling labor market.

After the Fed’s final policy meeting of 2024, Chair Jerome Powell reiterated that the labor market is easing without triggering alarm. The central bank scaled back the expected rate cuts for 2025, as Powell underscored the importance of further inflation moderation. Lower interest rates generally benefit gold, which doesn’t yield returns, but the cautious outlook weighed on bullion.

Oil prices held steady as traders weighed risks for 2025, including ample supply and uncertainty surrounding the incoming Trump administration. West Texas Intermediate hovered near $71 a barrel after a 1.6% gain last week, while Brent traded above $74.

Expectations of a market oversupply next year could challenge OPEC and its allies in their efforts to restore production cuts. Crude is on track for a yearly loss, with prices constrained to a narrow range since mid-October amid mixed signals. Persistent Middle East tensions and concerns over Chinese demand—the world’s largest oil importer—add to market volatility.

President-elect Donald Trump’s policies are also expected to influence the market. His threats of tariffs on Canadian and Mexican oil and his national security adviser’s call for “maximum pressure” on Iran are likely to keep traders on edge.

The S&P 500 fell 1.1% on Friday, with the Nasdaq 100 dropping 1.4%, as broad-based losses hit every major industry group. Technology megacaps, which have driven over half of the S&P 500's gains in 2024, faced the sharpest declines.

Treasuries also retreated last week, with the 10-year yield rising 10 basis points to 4.63% after the Federal Reserve signaled fewer rate cuts in 2025. Meanwhile, the Bloomberg Dollar Spot Index rose 0.5%, fueled by strong US economic performance and anticipation of "America First" policies under President-elect Donald Trump. The dollar is on track for its strongest year in nearly a decade, supported by economic resilience and expectations of higher tariffs.

Asian stocks dipped in early trading, tracking Friday's tech-driven selloff on Wall Street. The MSCI Asia Pacific Index ended a five-day rally as Australian shares fell and Japan's Nikkei 225 weakened. Treasuries held steady after last week’s rise in yields. With year-end holidays thinning volumes, market moves could be more pronounced.

Indian benchmark indices ended with gains on Friday with Nifty above 23800. At close, the Sensex was up 226.59 points or 0.29 percent at 78,699.07, and the Nifty was up 63.20 points or 0.27 percent at 23,813.40.