On November 29, 2024, Indian benchmark indices Nifty and Sensex made a notable recovery, bouncing back into positive territory after experiencing their steepest single-day fall in nearly two months. The Sensex surged by over 400 points, while the Nifty reclaimed the 24,000 mark, driven primarily by significant gains in the pharma and energy sectors.
Market Overview
At approximately 9:45 AM IST, the Sensex was up 407.27 points or 0.52%, reaching 79,451.01, while the Nifty gained 129.50 points or 0.54%, climbing to 24,043.70. The market saw a breadth favoring advances, with 1,793 shares rising against 1,041 shares that declined, and 140 shares remaining unchanged
Key Drivers of Market Movement
- Sector Performance:
- The Nifty Pharma and Energy stocks rose between 0.4% and 1%, with major contributors including Sun Pharma, Dr. Reddy’s Laboratories, and Divi’s Laboratories.
- Notably, shares of Adani Group companies like Adani Green Energy surged up to 10%, buoyed by their inclusion in the NSE’s futures and options segment
- Foreign Institutional Investment (FII):
- Despite the positive opening, concerns lingered as FIIs offloaded a substantial Rs 11,756 crore in cash markets on November 28, leading to total outflows for November nearing Rs 42,000 crore. This sell-off followed a brief period of net buying
- Economic Indicators:
- Analysts attribute the market’s volatility to expectations surrounding the pace of rate cuts by the Federal Reserve amid robust U.S. economic growth and persistent inflationary pressures. The Core PCE Price Index rose by 2.8% year-on-year in October, influencing market sentiment
Notable Stocks
- Top Gainers:
- Adani Green Energy: +10%
- Sun Pharma: Strong performance contributing to Nifty Pharma gains
- Dr. Reddy’s Laboratories: Significant upward movement
- Key Losers:
- CreditAccess Grameen: Fell as much as 11% after Goldman Sachs downgraded its rating to ‘sell’, citing concerns over asset quality and over-leveraging in the industry.
- Zomato: Traded lower post its Qualified Institutional Placement (QIP) issue, raising funds at a discount to its floor price
Market Sentiment and Future Outlook
Despite today’s gains, market experts remain cautious. Ruchit Jain from Motilal Oswal noted that foreign institutional selling has reignited fears among investors, leading to a short-term bearish sentiment. He suggested that without positive market triggers, aggressive buying might be limited as the year draws to a close
Siddhartha Khemka from Wealth Management emphasized that investors are awaiting key data releases such as India’s Q2 GDP numbers and China’s manufacturing PMI. He noted that while optimism could return if geopolitical tensions ease, consolidation within a broader range is likely to continue.
Technical Analysis
The Nifty index is currently under cautious pressure after failing to maintain levels above 24,000. Analysts indicate that it is approaching a critical support zone between 23,800 and 23,900, which has historically acted as a strong cushion due to significant put-writing activity. A decisive breakout above 24,100 could lead to a short-covering rally potentially pushing the index toward 24,500, while a breakdown below 23,800 could escalate selling pressure towards 23,500
Conclusion
As we move forward into December, market participants will closely monitor economic indicators and geopolitical developments that could influence trading sentiment. The current environment suggests cautious optimism among investors as they navigate through volatility fueled by both domestic and international factors.
