Markets Open Higher on Global Cues, Santa Rally Hopes

On December 26, 2024, Indian equity benchmarks kicked off the day on a positive note, reflecting investor optimism fueled by favorable global market trends and hopes for a year-end rally. The Sensex started at 78,557.28, up from its previous close of 78,472.87, and surged to 78,726.61 by 9:45 AM, marking a gain of 253.74 points or 0.32 percent. Similarly, the Nifty commenced at 23,775.80, compared to its earlier close of 23,727.65, and was trading at 23,810.25, up by 82.60 points or 0.35 percent.

Market Leaders and Laggards

Among the key gainers, BPCL led the way with a rise of 1.99 percent, followed by SBI Life Insurance, which advanced 1.30 percent. Adani Ports notched a 0.98 percent increase, while Axis Bank and Bharti Airtel saw gains of 0.94 percent and 0.93 percent, respectively. On the downside, Trent fell by 0.47 percent, with Tech Mahindra, Asian Paints, Cipla, and TCS also experiencing declines.

Rupee Weakens

In early trading, the Indian rupee weakened by 10 paise to reach a record low of 85.25 against the US dollar, largely due to ongoing foreign capital outflows and rising demand for dollars at month-end.

Global Influences

The positive market sentiment is attributed to a strong performance in U.S. markets, which reached record highs in a holiday-weakened session on Tuesday. Analysts pointed to lower-than-expected consumer confidence data and a decline in November's PCE inflation, which alleviated fears of imminent interest rate hikes from the Federal Reserve. Vikas Jain, Head of Research at Reliance Securities, commented on these optimistic global indicators.

RBI’s Outlook and Market Trends

The Reserve Bank of India's optimistic forecast for GDP growth also contributed to the upbeat sentiment. The RBI projected a 6.8 percent GDP growth in Q3 FY25 based on positive trends in high-frequency data. However, Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted a downward revision of the FY25 growth outlook from 7.2 percent to 6.4 percent, indicating concerns over economic performance.

Broader Market Focus

In the broader market, mid-cap and small-cap stocks were in the spotlight, particularly in the pharma, realty, and mid-cap sectors. Stocks from the Tata Group continued to gain traction following news of Tata Capital’s planned IPO. Tata Investment Corporation surged by 4.24 percent, Tata Technologies climbed by 4 percent, and Tata Motors increased by 1.79 percent.

Global Market Overview

On the international front, Asian markets were buoyant amid the holiday-thinned trade, with world equities expected to finish the year up over 17 percent, largely fueled by enthusiasm surrounding artificial intelligence advancements and robust U.S. economic growth.

Commodity Market Insights

In the commodities market, gold held steady at $2,615 per ounce, while Brent crude futures rose by 1 percent to $74 per barrel amid geopolitical tensions in Russia and the Middle East.

Foreign Investment Trends

Foreign institutional investors (FIIs) have maintained a selling trend, offloading equities worth Rs 2,454.21 crore on December 24. In contrast, domestic institutional investors have demonstrated strong buying activity, investing Rs 2,819.25 crore on the same day.

Market Outlook

Technical analysts are keeping an eye on key levels to look out for. "On the upside, levels of 23,870/78,800 will signal an immediate breakout for bullish traders. If 23,870 is crossed, we could see significant short-covering, propelling the market towards 24,000-24,065/79,300-79,500," explained Shrikant Chouhan, Head of Equity Research at Kotak Securities.

The India VIX, which gauges market volatility, fell by 2.53 percent to 13.1775, pointing to a relatively stable market environment. However, traders are advised to proceed with caution, considering the upcoming expiration of the December series F&O contracts later in the day.

Markets, Stocks, Rupee