Stock market today: The key domestic indices, Nifty 50 and Sensex, declined on Tuesday, pressured by major financial stocks and Reliance Industries, as investors remained cautious ahead of the US Federal Reserve's meeting on December 18, which is being closely monitored for indications regarding its future rate-cut strategy.
The Nifty 50 index commenced trading at 24,584.80 points, decreasing by 83.45 points or 0.34 percent. Similarly, the Sensex fell by 236 points, starting at 81,511 points.
Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, mentioned that global markets are eagerly anticipating the FOMC's decision on Wednesday. The markets have already factored in a 25 basis point rate cut, making the Fed chief’s remarks the primary focus. A shift away from a dovish tone would be viewed negatively from a market standpoint, although this scenario is unlikely.
The US services PMI reported a robust figure of 58.5%, suggesting a strong economy, which bodes well for the markets. Export sectors such as IT and pharmaceuticals will gain from a weakening rupee, while importers will face higher costs that could affect their stock prices.
The benchmark index Nifty 50 traded in the red during Monday’s session, weighed down by weakness in Financial and IT stocks, closing at 24,668.25 with a 0.40% decline. Sectorally, Nifty Realty emerged as the top performer, gaining over 3%, followed by Media, which added 1.45%. In contrast, Metals and Energy lagged, while IT stocks saw profit booking after a strong rally in recent sessions.
Despite this, broader market momentum remained strong, with Nifty Midcap and Smallcap indices rising over 0.6%, outperforming the benchmark. Market participants remain focused on the upcoming U.S. Federal Reserve's monetary policy decision for potential clarity on interest rate cuts.
On the daily chart, Nifty 50 recovered from the major support zone at 24,350 and sustained above 24,700 in Friday’s session. However, Monday saw a decline, with the index unable to breach the previous day’s high. Despite this, the short-term outlook for Nifty 50 remains bullish. The index is consolidating near its immediate breakout level of 24,800, with a decisive move above this expected to push it toward 25,000 and potentially 25,300 levels.
Traders are advised to follow the trend while monitoring key levels and the impact of the U.S. policy decision. On the downside, the critical support zones are at 24,500 and 24,350, while resistance levels lie at 24,800 and 25,000.
On shares to buy or sell on Tuesday, Sachin Gupta recommends JK Paper, and Kotak Mahindra Bank.
On the daily chart, the stock has rebounded from the support of the falling trendline and the 100-day EMA, indicating bullish strength in the short term. Additionally, the formation of a Pennant Pattern, a bullish technical setup, suggests a positive bias for the stock. This is further supported by higher trading volumes and a positive crossover in the RSI, which confirms the buying momentum.
Based on these technical indicators, we recommend buying JK Paper around ₹475–470, with a stop-loss set at ₹448, aiming for potential upside targets of ₹503 and ₹520.
After taking support around the 200-DMA, the stock has formed a Bullish Engulfing candlestick pattern on the daily chart, indicating a bullish reversal in prices. Additionally, the stock has sustained above the Middle Bollinger Band, which reinforces the momentum on the higher side. However, the price is currently hovering near the 50% retracement level around the 1,800 mark. Other technical indicators, such as RSI and MACD, have shown a positive crossover on the daily chart, signaling bullish momentum in the short term.
Based on these observations, traders are advised to buy Kotak Bank only if it closes above ₹1,810, with a stop-loss at ₹1,738, for the potential target of ₹1,885 and ₹1,940.
Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.
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