Market Recap: Rollercoaster Start for Indian Stocks in 2024! ๐ŸŽข๐Ÿ“ˆ Dive into Red Sea Concerns, Top Gainers, and Technical Insights!

The first week of 2024 witnessed a cautious tone in the Indian stock market as concerns over disruptions in the Red Sea affecting global supply chains and rising freight costs took center stage. Additionally, the output of Indiaโ€™s eight core industries experienced a downturn, reaching a six-month low of 7.8% in November 2023, primarily due to declines in crude oil and cement sectors.

Reflecting these signals, the BSE Sensex saw a dip of 214 points, or 0.3%, closing at 72,026 by January 5, 2024. The Nifty also slipped by 21 points, or 0.1%, settling at 21,711. Among sectoral indices, the BSE Realty index stood out as the top gainer, surging by 7.9% during the week. Meanwhile, BSE Power and BSE Healthcare indices posted gains of 3.4% and 3.3%, respectively. Conversely, the BSE Metal index witnessed a decline of 1.9%.

Within the Nifty 50 index, 24 stocks showed positive returns for investors during the week. Adani Ports and Special Economic Zone led the gainers with a weekly surge of 12.7%, followed by Oil & Natural Gas Corporation (5.5%), Bajaj Finance (5.2%), Tata Consumer Products (3.3%), and Cipla (3.2%). Sun Pharmaceutical Industries and Axis Bank also recorded gains of over three percent. On the flip side, Eicher Motors, JSW Steel, and Shree Cement faced declines of 6.4%, 5.8%, and 5.6%, respectively.

Technical Outlook: Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, noted that Nifty exhibited an upward bounce with volatility, forming a doji pattern at the highs. While caution is advised for longs, the short-term uptrend of Nifty remains intact. Resistance is anticipated around 21800-21850 levels, with a decisive move above 21850-21900 opening the path to the next upside target of 22200. Support is expected around 21500 in case of any dips.

Market Outlook: Vinod Nair, Head of Research at Geojit Financial Services, highlighted the weekโ€™s beginning with optimism about future rate cuts, easing global inflation, and softer bond yields. However, concerns over weak manufacturing data in China and the Eurozone, coupled with tensions in the Red Sea, led to a flat market close. Uncertainty was added by Fed minutes, contributing to doubts about the timing of future rate cuts. Amidst global concerns and anticipation of a subdued earnings season, the IT and Auto sectors displayed weaker performance, while mid and small-cap segments sustained their rally, particularly in the realty sector, driven by expectations of robust demand and positive housing loan disbursement data from banks.

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