The markets continued their consolidation streak for the second week, shedding nearly 0.5% amid a mix of headwinds and cautious sentiment.
Concerns over global volatility loomed large, with a spotlight on the impending inauguration of US President Donald Trump. His "America First" policies and rhetoric around trade tariffs kept global markets on edge. Domestically, a mix of tepid corporate earnings, persistent FII outflows, and selective buying in heavyweights further shaped the narrative.
The benchmark indices, Nifty and Sensex, fluctuated within a narrow range before closing at 23,092.20 and 76,190.46, respectively. A sharp contrast was visible in the broader markets, which faced intense selling pressure. The midcap and smallcap indices dropped between 2.5% and 4%, highlighting the divergence in market performance.
Here's how the major indices fared:
Index | Jan 17, 2025 | Jan 24, 2025 | % Change |
Nifty | 23,203.2 | 23,092.2 | -0.48% |
Bank Nifty | 48,540.6 | 48,367.8 | -0.36% |
Midcap Nifty | 54,607.7 | 53,263.0 | -2.46% |
On the sectoral front, the realty index bore the brunt of the sell-off, plummeting over 9%, followed by losses in energy (-4.1%) and auto (-2.7%). IT and FMCG stood out as the silver linings, posting gains of 3.55% and 0.48%, respectively.
Indices | Weekly Change (%) |
Nifty IT | 3.55 |
Nifty FMCG | 0.48 |
Nifty Bank | -0.36 |
Nifty Financial Services | -0.42 |
Nifty Pharma | -0.86 |
Nifty Select Midcap | -1.32 |
Nifty Metal | -2.15 |
Nifty PSU Bank | -2.24 |
Nifty Auto | -2.72 |
Nifty Media | -3.47 |
Nifty Energy | -4.10 |
Nifty Realty | -9.12 |
Weekly Top Gainers (Nifty 500)
Company | Weekly Gain (%) |
Bank Of India | 5.54 |
IDBI Bank | 3.79 |
Sobha | 3.22 |
Sumitomo Chem. Ind | 3.17 |
Kirloskar Brothers | 2.79 |
Weekly Top Losers (Nifty 500)
Company | Weekly Loss (%) |
Anantraj Ind. | -16.97 |
Laurus Labs | -12.84 |
Caplin Point | -11.81 |
Netweb Tech | -11.48 |
CDSL | -10.69 |
Global and Institutional Cues
Globally, the focus remained on the US Federal Reserve's FOMC meeting and statements from President Trump. With inflation on the rise, the Fed is likely to stay on the sidelines, but uncertainty persists. Domestically, FII outflows intensified, with net sales of Rs. 22,504 crore over the week, offset partially by DII buying of Rs. 17,577 crore.
India Equity - Institutional Funds Flow (in Rs. crore)
Date | FII | FII (Futures) | DII |
January 20, 2025 | -4,337 | 314 | 4,322 |
January 21, 2025 | -5,920 | -7,888 | 3,500 |
January 22, 2025 | -4,026 | 812 | 3,640 |
January 23, 2025 | -5,463 | 2,839 | 3,713 |
January 24, 2025 | -2,758 | 492 | 2,402 |
Total | -22,504 | -3,431 | 17,577 |
Technical Take
From a technical perspective, the benchmarks remain vulnerable to further downside, with critical support in the 22,700-22,900 range for the Nifty. Any recovery will likely face strong resistance in the 23,450-23,650 zone.
A notable concern is the disconnect between the benchmarks and the broader market, as selective buying in heavyweight stocks has cushioned the decline, while broader market stocks continue to face sharp corrections, eroding portfolio values.
Amid this correction, certain pockets are displaying resilience. Traders are advised to adopt a stock-specific approach and consider hedged positions, given the upcoming events and heightened uncertainty.
Looking Ahead
The coming week holds critical implications for both markets and the economy. The Union Budget 2025, scheduled for February 1, will be a focal point, with expectations of measures to boost consumption while maintaining fiscal discipline. Additionally, major earnings reports from Tata Motors, Maruti, ONGC, Cipla, and IndusInd Bank will provide cues on corporate performance.
Approach for Next Week
Caution is Key: With global uncertainties and domestic headwinds, adopting a conservative approach is advisable.
Stock-Specific Focus: Amid broader market weakness, focus on quality names showing resilience, particularly in IT and FMCG.
Event Preparedness: Budget announcements could trigger sharp moves. Hedged positions can help manage risk in these volatile times.
With markets at a crossroads, the mantra is clear—stay nimble, stay selective.
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