Market Insight, 06 December

Friday, 06 December 2024

Time : 8:15 AM IST

Insights :

Understanding Yesterday’s Market:

1. Nifty Performance:
   Nifty gained 240 points, closing at 24,708. The market opened on a weak note, falling nearly 250 points and finding support at 24,300. It then rallied 500 points from the lows, only to drop 350 points again, before recovering 250 points to close at 24,700. The session witnessed significant volatility ahead of the RBI MPC meeting.
2. Global Cues:
   • US Private Initial Jobs Data: The data appeared weak, which is positive for US markets as it raises the possibility of a rate cut.
   • US ISM Services Data: This data also came in weaker than expected, further adding to rate-cut expectations.
3. Sectoral Highlights:
   • The Nifty IT sector outperformed, driven by gains in Infosys and TCS, ending the day up by 1.95%.
4. FII and DII Activity:
   • FII (Foreign Institutional Investors) bought equities worth ₹8,500 crores.
   • DII (Domestic Institutional Investors) sold equities worth ₹2,300 crores.
   • FII fund flows will be critical as Nifty approaches its all-time high. Post the RBI MPC meeting, FII data will be important to watch. If FIIs turn consistently positive, it would be a strong signal for the Indian markets, even in the face of short-term negative reactions.
5. FII Derivatives Positioning:
   • FIIs added 28,000 long contracts and covered 9,000 short contracts, bringing the long-short ratio to 44%:56%.
   • This marks the third consecutive day of FII buying in Indian markets after a prolonged period of selling.

Today’s Cues:

1. RBI MPC Expectations:
   • Markets are expecting a 25 bps repo rate cut or a CRR cut.
   • A 50 bps CRR cut could inject ₹1.2 lakh crores into the banking system, while a 25 bps cut could free up ₹60,000 crores. This would enable banks to lend more, boosting economic growth without increasing inflation.
2. Key Statements to Watch:
   • The RBI Governor’s commentary on GDP projections and any hints about a potential rate cut in February will be closely monitored.
3. Nifty Support and Resistance:
4. Though support and resistance will not work today , but as per OI option writers are expecting a range from 24500 to 25000