The Indian economy likely to moderate to 6.5% in the July-September quarter of the current fiscal due to an uneven performance across sectors and a decline in private consumption, especially in urban areas amid high food inflation. Heavy rainfall, weak corporate margins, and subdued exports weighed the overall GDP print.
India’s Q2 GDP data will be released today- Daily Market Update 7th Jan 2025
Overview and Outlook
Global Stock Market Today
- Barring DOW, other US equity markets settled higher.
- European equity markets settled higher in range 0.3% to 1.5%.
- Most of the Asian markets were trading on a positive note.
- GIFT Nifty is up by 70 points, Nifty futures likely to open around 23800 levels.
Nifty Overview & Outlook
The Indian benchmark index, Nifty, gave-up nearly all the gains from its recent relief rally and faced its second consecutive day of selling pressure. Investor sentiment was rattled by reports of the HMPV virus entering India, affecting few in Karnataka. Additionally, concerns about a probable rate hike by the Bank of Japan in its upcoming monetary policy raised fears of capital outflows from India.
On the domestic front, HDFC Bank, which has the largest weight of 12.7% in Nifty50, fell more than 2% after its Q3 update showed deposit growth (15.8%) outpacing loan growth (3%). Meanwhile, ITC, which holds a 4.01% weight in Nifty50, dropped over 2% after the announcement of its ITC Hotels demerger and the stock turning ex-date. Furthermore, rising crude oil prices and the USD/INR hitting an all-time high at the start of the session further dampened market sentiment.
As a result, Nifty declined by 1.6%, with the Bank Nifty underperformed, falling 2.1%. In the broader market, the Midcap index experienced one of its sharpest declines, dropping 2.4%, while the Smallcap index underperformed even further, losing nearly 3%. Sector-wise, all sectors closed in the red, with Nifty PSU Banks leading the losses with a 4% drop. In contrast, Nifty IT was the least affected, shedding only 0.1%, supported by a stronger dollar.
From a technical perspective, Nifty retraced after a brief three-day relief rally, erasing most of its gains. The index is currently near its support zone of 23560-23460. If the negative sentiment persists and Nifty falls below 23460, the next support level is 23260. On the upside, in the event of a bounce, the first resistance lies at 23710, followed by 23890.
Derivatives Overview & Outlook
Yesterday, short buildup was seen in Banknifty and Finnifty futures with an increase in open interest by 7% and 15.2% respectively along with some long unwinding in Nifty and Midcapnifty futures with decrease in open interest by around 1% each.
All F&O sectoral indices settled lower. Amongst them, Banking, Capital Goods, Pharma and Power stocks witnessed maximum addition of short positions whereas some long unwinding was observed in Cement, FMCG and Technology stocks.
On options front, further call writing was seen at multiple strike. Maximum positions are at 25000 CE followed by 24500 & 24200 CE and 23000 PE. Quantum of call positions is significantly higher than the quantum of put positions that is a negative sign.
Institutional Trading Activity
Yesterday, FIIs sold stocks worth Rs 2575 Cr in the cash segment, sold stocks futures worth Rs 2143 Cr and bought index futures worth Rs 242 Cr. DIIs were net buyers in the cash segment to the tune of Rs 5750 Cr.
Nifty Futures, Banknifty Futures and Finnifty Key Levels
Nifty – Resistances 23850-23950; Supports 23650-23550
Banknifty – Resistances 50200-50600; Supports 49600-49500
Finnifty – Resistances 23600- 23720; Supports 23300-23200
F&O Security in Ban Today: MANAPPURAM, RBLBANK, HINDCOPPER.
Disclosure
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