Morning Mint Newsletter
Wednesday, January 22, 2025
Market Overview
- Indian equity markets were extremely volatile through out the day, and experienced a downturn on Tuesday, influenced by global trade uncertainties and domestic factors.
- The Sensex declined by 1.60%, closing at 75,838.36 points, while the Nifty 50 dropped 1.37% to settle at 23,024.65, very close to the psychological level of 23000.
- Despite the Open near 49500, Nifty Bank closed below 48600 at 48570. Any upside attempt in the markets were eventually failed in Tuesday market.
Key Influences on the Market
- Global Trade Concerns: U.S. President Donald Trump’s announcement of potential 25% trade tariffs on Mexico and Canada has introduced uncertainty, affecting investor sentiment worldwide.
- Foreign Portfolio Investors (FPIs): FPIs have been net sellers in the Indian market for 13 consecutive sessions, offloading approximately ₹6.7 billion in January.
- Domestic Institutional Investors (DIIs): While the FIIs been selling, DIIs continue to support the market, mitigating some of the impacts of FPI outflows.
Technical Insights
- The Nifty index formed a bearish engulfing pattern, indicating potential continued bearish momentum. Tuesday’s candle on Nifty chart is seen engulfing last 6 days’ candles.
- Support Level: 23,000 points. A drop below this could lead to further declines towards the 22,786 – 22,500 range.
- Resistance Levels: 23,300 and 23,500. A sustained move above these levels would be necessary to confirm a bullish reversal.
Global Factors to Watch
- Bond Yields: Rising bond yields are drawing investments away from equities and increasing corporate borrowing costs.
- Federal Reserve Policies: Investors are anticipating the Federal Reserve’s decisions on interest rates, with expectations of a quarter percentage point cut.
Stocks in Focus
- Zomato: Shares fell by 10.5% due to disappointing quarterly profits.
- Mankind Pharma: Experienced a 5.4% decline following a rating downgrade.
- Apollo Hospitals: Saw a 2% increase after an analyst upgrade.
Investor and Trader Advisory
- Given the current volatility, investors are advised to exercise caution.
- Implementing strict stop-loss measures is recommended for traders. Remember, ‘Cash in hand’ is also a position in the market
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