Morning Mint Newsletter: Is it a dead cat bounce?
Wednesday, January 29, 2025
Market Overview
- Positive Close on Tuesday: The Indian stock market ended higher on Tuesday, with the Sensex rising by 535.24 points to 75,901.41, and the Nifty 50 gaining 128.10 points to close at 22,957.25. This uptick was mainly driven by financial stocks, following the Reserve Bank of India’s measures to enhance liquidity, which has increased optimism about a potential interest rate cut in February.
Technical Insights
- Nifty’s Resistance and Support Levels: The Nifty index continues to exhibit a ‘sell-on-rise’ trend. Immediate resistance is identified at 23144, while support is seen at 22,860/22800.
Momentum indicators suggest the possibility of a short-term rebound, often referred to as a ‘dead cat bounce’. Options data indicates increased put writing at the 23,000 level, signaling support for the index.
Foreign Investment Trends
- Continued FPI Outflows: Foreign Portfolio Investors (FPIs) withdrew ₹4,921 crore from Indian equities on Tuesday 28 January, marking the 18th consecutive session of net selling. This trend reflects ongoing caution among foreign investors regarding the Indian market.
Global Tech Developments
- AI Advancements Impacting Markets: The success of advanced AI models, such as DeepSeek, has caused significant shifts in the U.S. tech market. However, experts see positive implications for India’s AI sector, suggesting potential growth opportunities driven by these technological advancements.
Looking Ahead
- Key Factors to Watch: Traders be cautious with bounces around 23000 level as it might be a dead-cat-bounce. Trade with strict stop loss.
- Investors should monitor upcoming Union Budget on 1st of February, markets are anticipating a tax benefit for consumers to free up cash in hand for consumers.
- That being said, few brilliant stocks are trading at reasonable prices right now, it’s a good time to accumulate in your holdings or even add new stocks in your portfolio.
Stay informed with Morning Mint for your daily financial news and insights.
– Team Morning Mint
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