The dollar strengthened against most major peers after US President Donald Trump reiterated he was weighing a 10% tariff on China.
A resilient US economy, high interest rates and the dollar’s unrivaled status as the world’s dominant reserve currency are also raising the prospect of further gains in the greenback.
Global Stock Market Today
Nifty Overview & Outlook
The Indian benchmark index, Nifty, began the session with a flat to positive trend, reflecting gains in US futures and marginally higher Asian markets. However, Nifty soon lost its early momentum and experienced a sharp decline, likely in response to Donald Trump’s inaugural speech on January 20, 2025. Trump reaffirmed his plan to impose 100% import tariffs on BRICS nations if they discontinue using the US dollar in global trade.
On the Domestic front, persistent selling pressure from FIIs, combined with weaker-than-expected Q3 corporate earnings, contributed to the decline. Additionally, a sell-off in Reliance Industries and a significant drop in Adani group stocks following a downgrade by Jefferies further dampened market sentiment.
After a highly volatile session, Nifty closed in the red with a notable 1.4% decline, while Nifty Bank slightly underperformed, falling 1.6%. In the broader market, the Midcap and Smallcap indices significantly underperformed, losing 1.9% and 2.6%, respectively. All sectoral indices ended in the negative, with Nifty Realty leading the decline, down by 4.1%. Nifty FMCG showed the least loss, closing down by just 0.2%.
From a technical perspective, Nifty opened on a flat to positive note and attempted to break through the resistance at 23325 during intraday trading, but failed to maintain its gains and reversed course. Nifty eventually fell below its previous swing low of 23047 and briefly dipped below the 23000 mark, closing just above it. It appears that Nifty has formed a downward flag-like pattern, signaling a breakdown. If the index continues to fall below 23000, we expect the next support levels at 22780 and 22520. With Nifty in the oversold zone, any sign of short covering could lead to a rally, with resistances at 23150 and 23320.
Derivatives Overview & Outlook
Yesterday, short buildup was seen in Nifty and Banknifty futures with increase in open interest by 6.4% and 7.5% respectively, whereas no significant change was seen in Finnifty and Midcapnifty futures on open interest front.
All the sectoral indices settled lower. Amongst them, Banking, Capital Good, Power and Realty stocks witnessed maximum addition of short positions along with some long unwinding in Media and Pharma stocks.
On options front, call writing was seen at multiple strikes along with put unwinding at multiple strikes. Maximum positions are at 22000 PE followed by 22500 PE and maximum call positions are at 24000 CE followed by 23500 CE.
Institutional Trading Activity
Yesterday, FIIs sold stocks worth Rs 5920 Cr in the cash segment, sold stocks futures worth Rs 5458 Cr also sold index futures worth Rs 2428 Cr. DIIs were net buyers in the cash segment to the tune of Rs 3500 Cr.
Nifty Futures, Banknifty Futures and Finnifty Key Levels
Nifty – Resistances 23000-22850; Supports 23200-23400
Banknifty – Resistances 49000-49200; Supports 48400-48200
Finnifty – Resistances 22800- 23000; Supports 22600-22500
F&O Security in Ban Today: ABFRL, ANGELONE, BANDHANBNK, CANFINHOME, DIXON, LTF, KALYANKJIL, MGL, MANAPPURAM & RBLBANK.
Important Results Today : BPCL, CIGNITITEC, COFORGE,HDFCBANK, HINDUNILVR,HUDCO, PERSISTENT, PIDILITIND, POLYCAB.
Disclosure
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