Market poised for relief rally

GIFT Nifty:

The GIFT Nifty December futures contract is currently up 28.50 points, indicating a positive start for the Nifty 50.

Institutional Flows:

Foreign portfolio investors (FPIs) sold shares worth Rs 3,597.82 crore, while domestic institutional investors (DIIs) were net buyers to the tune of Rs 1,374.37 crore in the Indian equity market on 20 December 2024, provisional data showed.

According to NSDL data, FPIs have bought shares worth over Rs 7624.24 crore (so far) in the secondary market during December 2024. This follows their sale of shares worth Rs 39315.78 crore in November 2024.

Global Markets:

The Dow Jones index futures were up 96 points, signaling a positive opening for U.S. stocks today.

 

Asian stocks rose Monday after the US inflation data came in below expectations, boosting hopes for potential interest rate cuts. The dollar remained relatively stable.

Relief washed over markets as the US averted a government shutdown. President Biden signed a bill on Saturday, ending a period of uncertainty after Congress passed a temporary funding plan just before the deadline. This deal funds the government until March 14 and includes disaster aid and agricultural assistance.

US stock markets rebounded on Friday. Technology stocks, which had declined sharply after the Fed's decision, saw some recovery on Friday. NVIDIA (+3.1%), Micron (+3.5%), Broadcom (+1.1%), and Intel (+2.4%) all experienced gains.

On Friday, the S&P 500 gained 1.1% to 5,930.90, the Dow Jones Industrial Average rose 1.2% to 42,841.06, and the NASDAQ Composite climbed 1% to 19,572.60.

The PCE price index, a key inflation measure, rose 0.1% in November, slower than the October increase of 0.2%. This brought the annual PCE inflation rate to 2.4%, still above the Fed's 2% target, suggesting persistent inflationary pressures.

Domestic Market:

The key equity benchmarks suffered significant losses on Friday, marking their fifth consecutive day of decline. The Nifty 50 index closed below the 23,600 level, after reaching an intraday high of 24,065.80. The market witnessed a broad-based sell-off, with realty, PSU banks, and IT stocks leading the decline. The barometer index, the S&P BSE Sensex, plunged 1,176.46 points or 1.49% to 78,041.59. The Nifty 50 index tumbled 364.20 points or 1.52% to 23,587.50. In five consecutive trading sessions, the Sensex and Nifty slipped by 4.98% and 4.76%, respectively.

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