Mumbai, Dec 22 (NationPress) The market outlook for the upcoming week is poised to be influenced by multiple global and domestic elements, particularly those tied to the US market and FII data, as stated by experts on Sunday.
The US factors include - bond yields, the dollar index, initial jobless claims, new home sales figures, and Durable Goods Orders data.
Both global and Indian stock markets will observe a closure on Wednesday, December 25, in celebration of Christmas, leading to a shortened trading week of four days instead of the typical five. The markets have been impacted by a Santa effect, albeit negative, as significant profit booking occurred prior to the holiday.
During the trading session from December 16-20, the Indian stock market faced a sharp downturn. The Nifty index dropped by 1,180 points or 4.77 percent to close at 23,587, while the Sensex fell by 4,091 points or 4.98 percent to end at 78,041, breaking through the critical support level of 80,000. Meanwhile, the Bank Nifty concluded at 50,759, down 2,824 points or 5.27 percent.
In the previous week, the only sector to close positively was pharma, while all other sectors experienced selling pressure.
This decline is primarily attributed to FII selling and the US Fed's stance on interest rates, which has indicated only two potential rate cuts in 2025.
Furthermore, last week, FIIs offloaded Rs 15,828 crore in the cash market, whereas domestic institutional investors (DIIs) infused Rs 11,874 crore.
Puneet Singhania, Director at Master Trust Group, commented, "The Nifty50 has undergone a significant breakdown, retreating by 4.77 percent this week and closing near 23,600, below the vital 23,800 support level and the 21-week EMA. This has initiated broad-based selling across sectors. The next critical support level is at 23,200, where prices might find some support. On the upside, robust resistance exists in the 23,800-23,900 zone, and surpassing this could propel the index towards 24,300."
"Nonetheless, the overall market sentiment remains bearish, with a sell-on-rise strategy prevailing. Traders are advised to proceed with caution, keeping a close watch on support and resistance levels amidst increased volatility and weak technical signals," he added.
Pravesh Gour, Senior Technical Analyst at Swastika Investmart, noted, "The Bank Nifty has found support at its 200-day moving average (200-DMA), while the 100-day moving average (100-DMA) at 51,600 represents an immediate challenge. A drop below 50,400 could trigger further selling pressure, possibly driving the index down to 49,600. Conversely, a breakout above 51,600 may face resistance in the range of 51,800–52,000."
