Nifty, Sensex Today 3 December: Will Market Rally Continue?

Other notable market updates:

• The Indian rupee hit a record closing low of 84.74 against the US dollar.
• Dollar-rupee forward premiums continued to decline.
• The 10-year bond yield dipped to a 3-year low as policy-easing bets rose.
• The three-day meeting of the Reserve Bank of India's (RBI) rate-setting panel began today.
• Markets are factoring in a 72% likelihood of a 25-basis-point rate cut this month, with a total of 80 basis points in cuts anticipated by the end of next year.

Early Market Gains and Volatility

The Sensex and Nifty50 opened marginally higher, marking the fourth consecutive session of gains. This upward movement was attributed to gains in heavyweights like HDFC Bank, ITC, and L&T, ahead of the Reserve Bank of India's interest rate decision later in the week.

However, the market exhibited volatility, with the Sensex erasing early gains and falling over 150 points at one point. Despite this volatility, PSU Bank stocks, including UCO Bank and Central Bank of India, saw significant gains, rising up to 9%. This surge was linked to expectations of a potential CRR (Cash Reserve Ratio) cut by the RBI.

Sectoral Performance and Global Influences

IT Sector and Rate Cut Expectations

The Nifty IT index performed strongly, climbing 0.8% due to gains in TCS, LTIMindtree, and Wipro. Market sentiment indicated a 72% likelihood of a 25-basis-point rate cut in December 2024, with a total of 80 basis points in cuts anticipated by the end of the following year. This expectation of policy easing influenced investor behaviour.

Impact of South Korea's Political Situation

Global events also impacted market sentiment. The Seoul stock exchange experienced a decline of over 1% following political turmoil in South Korea, where President Yoon Suk Yeol briefly declared and then lifted martial law. This event had ripple effects on Asian markets, including India.

Specific Company Updates

Ericsson and Bharti Airtel Deal

Ericsson announced a "multi-billion dollar" deal with Bharti Airtel for network expansion. This deal highlights the growth in the telecom sector and the investments being made in infrastructure development.

Cyient DLM and Arcedo Systems Partnership

Cyient DLM and Arcedo Systems signed an MoU to establish a 500 kWp solar power plant, demonstrating the increasing focus on renewable energy and sustainability initiatives by companies.

CarTrade Tech's User Milestone

CarTrade Tech announced that its platforms CarWale, BikeWale, and OLX India each crossed 150 million yearly unique users, indicating strong growth in the online automotive marketplace.

JioHotstar Domain Acquired by Viacom 18

The domain name "JioHotstar.com" is now officially owned by Viacom18 Media Pvt. Ltd., following the merger of Reliance Jio, Disney Hotstar, and Viacom18. This acquisition concludes a series of ownership claims that began with a Delhi-based app developer who secured the domain name anticipating the merger. The domain was later acquired by Dubai-based siblings who offered it to Reliance for free, despite receiving substantial offers.

December 3 Updates

Indian equity benchmark indices, BSE Sensex and Nifty50, opened in green on Tuesday. Monday's session saw the Sensex rally 445.29 points to close at 80,248.08, while the Nifty 50 settled 144.95 points higher at 24,276.05. This positive momentum is expected to continue, driven by gains in Asian markets and positive cues from Wall Street, at least until the Reserve Bank of India’s (RBI) monetary policy outcome on Friday.

Nifty 50 Analysis and Prediction

The Nifty 50 formed a "reasonable bullish candle" on the daily chart with a lower shadow on Monday. Analysts believe that a decisive move above the hurdle of 24,350 could confirm the higher bottom reversal pattern and signal a significant upward trend reversal in Nifty 50. The potential upside target for the Nifty 50 is estimated to be around 24,700 - 24,900 levels. On the downside, strong support is indicated at the 24,000 level.

Bank Nifty Analysis and Prediction

The Bank Nifty, which tracks the performance of banking stocks, ended Monday's session 53.40 points higher at 52,109. A Doji-like candlestick pattern, suggestive of market indecision, was observed. Market experts believe the Bank Nifty is poised for a move towards its immediate resistance at the 52,500 level. The 20-day Exponential Moving Average (EMA), currently at 51,700, is expected to act as a strong support level.

Factors Influencing Market Performance

Several factors are influencing the Indian stock market's performance:

• Global Market Cues: The Indian market is closely tracking global trends, especially in the US and Asian markets. Positive cues from Wall Street and gains in Asian markets are contributing to the optimistic outlook.
• RBI Monetary Policy: The market awaits the outcome of the RBI's monetary policy meeting scheduled for Friday, December 6, 2024. A potential rate cut is anticipated, which could further influence market sentiment.
• Economic Data: Investors are closely watching economic data releases, such as GDP growth and manufacturing activity, to assess the overall health of the economy.
• FII/FPI and DII Activity: Foreign institutional investors (FII) and domestic institutional investors (DII) play a crucial role in shaping market direction. Recent trends suggest a reversal in foreign fund outflows, providing some support to the market.

Investor Sentiment and Outlook

The overall market sentiment appears cautiously optimistic, with investors looking for further cues from the upcoming RBI policy meeting and economic data releases. While positive global cues and the return of foreign investors offer support, concerns around slowing economic growth and a weak rupee persist. Investors are advised to stay informed and exercise caution in their investment decisions.