By theindianinvestor 
Wednesday, 5th Feb 2025
Time : 7:45 AM IST
insights :
1. Yesterday, Nifty gained 378 points and closed at 23,789.
2. Nifty Smallcap and Midcap indices gained over 1% and 1.5%, respectively.
3. Markets opened with a gap-up of about 150 points, then went up to nearly 200 points, fell by 130 points, and finally gained nearly 320 points.
4. This was an expected short-covering rally, as FIIs were holding net shorts of nearly 90%.
5. This kind of rally was expected on Budget Day, but it happened yesterday instead.
6. A positive sign is that India VIX fell by 2% yesterday.
7. FIIs bought Rs 800 crores in the cash market yesterday, added 14.3k longs, and covered 16.4k shorts. Their net shorts now stand at 83% vs. 90% earlier.
8. The financial sector contributed the most to Nifty’s rally, possibly indicating that markets are expecting an interest rate cut.
9. Reliance, after many days, gained nearly 3%, contributing 60 points to Nifty. The rally was driven by news of bringing SHEIN back to India after a 5-year ban.
10. Today, Delhi elections are taking place, but markets seem more focused on the RBI MPC decision.
11. US markets closed in green.
12. Asian markets are trading marginally higher.
13. GIFT Nifty is indicating a 60-point gap-up opening for our markets.
14. The Dollar Index is cooling off from its recent high of 109.5, as negotiations continue for a one-month relief on Trump’s 25% tariffs against Mexico and Canada. It is now trading at 107.9.
15. US 10-year bond yields are steady at 4.5%.
16. The Rupee is trading above 87 against the Dollar. One positive takeaway is that this makes Indian goods cheaper in global markets, potentially boosting exports in textiles, pharma, and IT.
17. Nifty may take support around 23,500 and face resistance at 23,800. Sustaining above this level can lead to a move towards 24,000, which is a key psychological mark.