Trade Setup For Jan. 7: Nifty Likely To Test Support At 23,260–23,460
The markets are expected to remain volatile until concerns relating to the HMPV ease out.
The Indian stock markets are showing signs of volatility, with experts providing insights into the near-term outlook for key indices.
A short-term pullback is probable if the NSE Nifty 50 maintains above the level of 23,500, according to Hrishikesh Yedve, research analyst at Asit C Mehta Investment Interrmediates Ltd. "However, if the index slides below 23,500, weakness may intensify."
The markets are expected to remain volatile until concerns relating to the human metapneumovirus ease out, according to Siddhartha Khemka, head of research, wealth management at Motilal Oswal Financial Services Ltd. "We could see stock/sector-specific action on the back of pre-quarterly business updates and the start of the third-quarter result season."
The daily chart shows a strong bearish candlestick, indicating that the Nifty is likely heading towards testing its previous support zone of 23,260–23,460. The resistance for the index is seen at 23,900, according to Aditya Gaggar, director of Progressive Share Brokers Pvt.
Yedve emphasised that the 49,700–49,600 level would act as immediate support for the Bank Nifty. "If the index remains below 50,500, ongoing weakness will continue."
FII/DII Activity
Foreign portfolio investors stayed net sellers for the second straight session on Monday and sold stocks worth approximately Rs 2,575.1 crore, while domestic institutional investors stayed buyers for the 14 consecutive session and bought stocks worth Rs 5,749.7 crore, according to provisional data from the National Stock Exchange.
F&O Action
The Nifty January futures were down by 1.5% to 23,730 at a premium of 114 points, with the open interest down by 1.34%.
The open interest distribution for the Nifty 50 Jan. 9 expiry series indicated most activity at 25,000 call strikes, with the 21,850 put strikes having maximum open interest.
Major Stocks In News
Tata Motors - The company reported a dip in production but an increase in sales during the third quarter of fiscal 2025. Production stood at 1,33,898 units, slightly lower than the 1,35,296 units produced in the third quarter of fiscal 2024. However, sales rose to 1,39,424 units compared to 1,37,875 units in the same period last year.
Mahindra & Mahindra - The company reported a 20% increase in total production, reaching 53,361 units in comparison to 44,495 units in the same period last year. Total sales saw a 14% rise, amounting to 66,676 units compared to 58,369 units YoY. Additionally, total exports surged by 70%, with 3,092 units exported versus 1,819 units in the previous year.
Ashoka Buildcon - The company's arm has executed a concession pact with NHAI, with an accepted bid project cost of Rs 1,391 crore.
Market Recap
The benchmark indices declined the most since Oct. 3, 2024, ending lower for the second consecutive session on Monday as a broad selloff in Indian equities sparked high volatility and loss of investor confidence.
The NSE Nifty 50 closed 388.70 points or 1.62% down at 23,616.05, the lowest since Dec. 20. The BSE Sensex settled 1,258.12 points or 1.59% lower at 77,964.99, the lowest since Nov. 21
Global Cues
Most stocks in the Asia-Pacific region advanced on Tuesday after President-elect Donald Trump denied a tariff plan that covered only critical imports. Wall Street gained for the second consecutive led by Nvidia Corp.
Japanese markets opened higher with the benchmark Nikkei rising by 1.69%, or 670 points, to 39,975 as of 6:36 a.m. Australia's S&P ASX 200 was up 15.6 points, or 0.19%, at 8,272.
Asian currencies pared some losses after Trump denied the Washington Post's report that the upcoming President's aides were exploring tariffs that only cover critical imports.
The dollar index — which tracks the greenback's performance against a basket of 10 leading global currencies — was trading higher by 0.09% at 108.35 after rising over 1% on Monday.
Traders brace for a volatile first half of 2025 with policies in the US government during the Trump presidency and trade decisions in focus. Most stocks in Asia traded lower on Monday with Hang Seng leading the fall among major regional benchmarks.
The Canadian dollar rose after Prime Minister Justin Trudeau resigned on Monday amid mounting pressures. Tuesday, Jan. 7 will see CPI releases from the Philippines, France, Italy, and the Netherlands, along with US job openings data, offering insights on the labour market.
Stocks on Wall Street advanced for the second day powered by Nvidia, as the chip market surged to an all-time high on Monday. The S&P 500 and the tech-heavy Nasdaq Composite rose 0.55% and 1.24%, respectively. The Dow Jones Industrial Average slipped 0.06%.
On Monday, Fed Governor Lisa Cook said that policymakers can proceed more cautiously amid a sturdy labour market and lingering inflation pressures, Bloomberg News reported.
Crude oil prices steadied after its first drop in six sessions. The Brent crude was trading 0.24% lower at $76.12 a barrel as of 6:50 a.m. IST, and the West Texas Intermediate was up 0.33% at $73.32.
Money Market
The rupee weakened by five paise to close at 85.83 against the US dollar. It had closed at 85.78 on Friday. The currency had opened at Rs 85.77 against the greenback, according to Bloomberg.
