Blame it on FIIs Selling, FIIs Selling, and FIIs Selling!

*The Week That Was @ 7:30 AM – Saturday, January 11th 2025*

January 6th 2025 to January 10th 2025.

# Nifty and its stocks were smashed down.

A scary Monday that started with a plunge, worsened as the week progressed only to end the week with steep losses.

Blame it on FIIs Selling, FIIs Selling, and FIIs Selling!

Nifty (-2.39%, 23432)
Sensex (-2.33%, 77379)

# Normally, institutions sell slowly as to not tank the market and panic the retail investors who are buying the dip. But this week, there was a sense of panic with FIIs dumping heavily.

# So, FIIs selling is basically seen haunting investors at Dalal Street as in this January month so far, they have sold to the tune of Rs. 21,683 crores.

Please note, total FIIs selling has crossed over 2-lakhs crore since September 27, the day Nifty hit an all-time-high at 26277.35.

Meanwhile, this FY25, FIIs have already net sold to the tune of Rupees 280208 crores.

# The other 7-big negative catalysts:

1) The Indian Rupee hit a new record closing low at 86.10 primarily pressured by a firm dollar. (Weak Rupee makes Indian stock markets less attractive to foreign investors and raises inflation fears).

2) Wall Street too has started New Year 2025 with a hangover after the US 10-year spiked higher to 4.79%, the highest in 14-months.

3) US job growth remains strong. A hotter-than-expected jobs report underscored the resilience of the US labor market, bolstering the Fed’s cautious approach to further rate cuts. The US economy unexpectedly added 256K jobs in December, way above forecasts of 160K and the unemployment rate surprisingly dropped to 4.1% from 4.2%.

4) The uncertainty tied to the Federal Reserve’s rate path.

5) The street suspects President-elect Donald Trump’s policies to be inflationary.

6) Immigration and taxation planned by President-elect Donald Trump.

7) Spike in WTI Oil prices towards $77 a barrel the highest since October, as concerns grew over potential US sanctions disrupting Russian oil supplies.

# Long story short: Tumultuous times ahead.

Weekly Recap: Instruments  LTP  Weekly % Change
Nifty 23432 (-2.39%)

Sensex 77379 (-2.33%)
Bank Nifty 48734 (-4.42%)
Nifty Midcap 15266 (-5.66%)
India VIX 14.91 +10.16%

Dow Jones 41977 (-1.74%)
Nasdaq 20840 (-2.16%)
Bovespa 118796 +0.26%

Crude Oil 76.11 +2.95%
Gold 2693 +2.14%
Silver 30.35 +2.81%
USD/INR 86.12 +0.42%

# Here are how indices performed in the week gone by:

1) Nifty snapped its 2-week winning streak, ending the week, down 2.39%.

2) Bank Nifty plunged hard, ending 4.42% lower at 48734 level.

3) Nifty Private Bank index dropped 4.34% while Nifty PSU Bank index ended 8.07% lower on weekly basis.

4) The broader markets were major underperformers as the Nifty Mid-cap 100 index dropped 5.66% while the Nifty Small-cap index dived 7.29% lower.

Bullish Sectors:
Nifty IT (+2.02%)

Bearish Sectors:
Nifty Reality Index (-7.83%)
Nifty PSE Index (-6.85%)
Nifty Media (-6.34%)
Nifty Energy (-5.99%)
Nifty Metal (-5.35%)
Nifty Auto Index (-4.11%)
Nifty Infra Index (-3.91%)
Nifty Pharma (-3.79%)
Nifty Oil & Gas Index (-2.77%)
Nifty FMCG Index (-1.21%)

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STOCK SPECIFIC NEWS:

1) TCS was star outperformer, jumping 4% in the week gone by on signs of demand revival, strong deal wins in Q3. TCS not just reported its highest third-quarter order book in five years, but also exhibited confidence to deliver stronger growth in CY25 and FY26.

2) Chemical stocks like SRF witnessed 14% surge after a report highlighted a sharp rise in global refrigerant gas prices. Navin Fluorine too gained 8% on reports of supply constraints for key gases like R32 and R125 which are creating challenges for the HVAC industry.
United Breweries are receiving drubbing as firm suspends beer supply to Telangana Beverages Corp

3) Biocon was in limelight on reports that it received an approval from Japan’s Pharmaceuticals and Medical Devices Agency (PMDA). The regulatory body gave the green light to Ustekinumab BS, a subcutaneous biosimilar injection to Stelara, marking a key breakthrough for the company.

4) Zydus Lifesciences surged 2.93% on reports that the company inked an agreement with US-based CVS Caremark.

CVS Caremark is one of the most patient-centric healthcare solutions providers in the US.

5) Berger Paints is looking to buy Akzo Nobel India’s promoter’s stake.

6) Dixon’s stock price has plunged 9% on reports of rising competition in the EMS space, as the Competition Commission of India (CCI) has granted approval for Tata Electronics Pvt. Ltd. (TEPL), a wholly-owned subsidiary of Tata Sons, to acquire a majority stake in Pegatron Technology India Pvt. Ltd. (Pegatron India).

7) The Nifty Bank Index cracked -4.42% in the week gone by amidst weak business updates from HDFC Bank and Union Bank of India.

HDFC Bank plunged 5.29% after its LDR (loan-to-deposit) ratio dropped below 100% for the first time post the HDFC merger.

Amongst PSU Banks, Union Bank of India dropped 16% on reporting weak Q3 performance update. The pessimism rubbed off on Punjab National Bank (-7.3%), SBI (-6.32%) and Bank of Baroda (-6.72%).

8) Meanwhile, Nykaa flared up +1.3% on reporting a healthy December quarter (Q3FY25) business update.

# In the week gone by, notable gainers amongst Nifty 50 were:
TCS +4.04%
TATA CONSUMER +3.55%
HCL TECH +2.48%
BRITANNIA +2.17%
SBI LIFE +2.11%

# And the losers were:
SHRIRAM FINANCE (-12.74%)
TRENT (-9.9%)
NTPC (-9.30%)
TATA STEEL (-7.9%)
ULTRATECH CEMENT (-7.81%).

# The Big Question: Will Nifty surrender all of its post-election day gains?

Well, if you are an investor at Dalal Street – you would want the ongoing exhaustion, anxiety and great sadness to quickly shift to joy, rediscovery and optimism.

Strictly speaking, Perma Nifty bulls will now have to bend and pray with both hands for the Federal Reserve to come riding in on a white horse and oblige with a big rate cut.

At home, all eyes turn towards Union Budget 2025 as the Finance Minister Nirmala Sitharaman has the singular responsibility of proving to the big investors across globe that the Prime Minister Narendra Modi’s magic is still on. We suspect, expectations are very high, way higher than those in previous budget.

Well, at the moment, Both the scenarios appear flimsy.

# Technically speaking, Nifty continues to trade way below its 200 DMA and now it’s also below its 200 EMA.

# Technically speaking, the bearish daily technical setup shall exacerbate more pain below 23263 (Low as on November 14th).

Below Nifty 23263, the next inter-month supports are placed at 21281 mark (June 4th Election day low).

# Bottom-line: Investors need to remember; stocks markets are simply not a sprint; they are also marathon many a times.

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