The unwinding of long positions at Dalal Street is not showing any signs of fatigue.

*The Week That Was @ 7:30 AM – Saturday, January 25th 2025*

January 20th 2025 to January 24th 2025.

# Nifty attracted bears for the 3rd straight week.

# The negative takeaway was that sentiments continue to remain extremely fragile considering the headwinds and pessimism that are lurking all over Dalal Street.

# The long and short of this week’s trading theme suggests that the unwinding of long positions at Dalal Street is not showing any signs of fatigue.

Nifty (-0.48%, 23092)
Sensex (-0.56%, 76190)

# Blame the pessimism at Dalal Street to the FIIs selling which continues to haunt investors at Dalal Street. Foreign investors are actually selling Indian equities at a record pace.

Ironically, this a bad sign…

1) This January so far, FIIs have sold to the tune of Rs. 69,080.20 crores.
2) This year, FIIs have been buyers only in 1-trading session.
3) Total FIIs selling has crossed over 2.5-lakhs crore since September 27, the day Nifty hit an all-time-high at 26277.35.
4) Meanwhile, this FY25, FIIs have already net sold to the tune of Rupees 325000 crores.

# The biggest negative catalyst as of recording: Trump’s tariff plans are on track.

US President Donald Trump has threatened 100% Tariff on BRICS Nations Over De-Dollarization Efforts.

Traders are also assessing US President Donald Trump’s threats to impose 25% tariffs on Canada and Mexico as soon as February 1

# Bottom-line: Tumultuous times ahead.
# Technically speaking, Nifty continues to trade way below its 200 DMA at 23985 mark.

The bearish daily technical setup is now exacerbated by lower high/low pattern on the daily charts.

Please note, below Nifty 23000, the next inter-month supports are placed at 21281 mark (June 4th Election day low).

# Long story short: There was a sense of panic with FIIs dumping heavily.

 

Weekly Recap: Instruments LTP Weekly % Change
Nifty 23092 (-0.48%)

Sensex 76190 (-0.56%)
Bank Nifty 48368 (-0.36%)
Nifty Midcap 14827 (-2.07%)
India VIX 16.75 +6.33%

Dow Jones 44525 +2.37%
Nasdaq 21893 +2.09%
Bovespa 122450 +0.10%

Crude Oil 74.39 -3.88%
Gold 2775 +2.79%
Silver 30.64 +1.15%
USD/INR 86.14 -0.52%

 

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

1) Nifty mostly traded with negative bias, ending the week, down 0.48%.

2) Bank Nifty too traded sluggish, ending 0.36% lower at 48368 level.

3) Nifty Private Bank index inched 0.30% higher while Nifty PSU Bank index dropped 2.24% on a weekly basis.

4) The broader markets were major underperformers as the Nifty Mid-cap 100 index slipped 2.07% while the Nifty Small-cap index plunged 4.05% lower.

Bullish Sectors:
Nifty IT (+3.55%)
Nifty FMCG Index (+0.48%)

Bearish Sectors:
Nifty Reality Index (-9.12%)
Nifty Energy (-4.10%)
Nifty Oil & Gas Index (-3.85%)
Nifty Media (-3.47%)
Nifty PSE Index (-3.27%)
Nifty Auto Index (-2.72%)
Nifty Infra Index (-1.87%)
Nifty Metal (-0.97%)
Nifty Pharma (-0.86%)

 

STOCK SPECIFIC NEWS:

1) Zomato was one of the biggest stock loser in the week gone by with a loss of over 13%, after reported a 57% Y-o-Y slide in net profit at Rs 59 crore for the October-December quarter (Q3FY25). Sequentially, profit was down 66.5%.

2) Dixon Technologies dropped 9.5% despite reporting strong performance in the December quarter of FY25 (Q3FY25), exceeding expectations and showcasing robust growth. (The company’s Mobile and Electronics Manufacturing Services (EMS) division emerged as the primary engine of the company’s growth during Q3. Massive profit booking blamed amidst stretched valuations).

3) Hindustan Unilever was range bound after declaring its Q3 results: HUL’s net profit surged 19% from a year ago due to a one-time gain of Rs 507 crore. Total income grew a moderate 1.7%.

4) HUDCO dropped 6.37% despite its Q3 net profit jumped 42% YoY to Rs 735 cror. (The Navratna company raised its borrowing plan for the current financial year from Rs 40,000 crore to Rs 55,000 crore. It cited “quantum jump in business” as the reason behind the decision).

5) Tata Communications dropped 4% despite its Q3 net profit rose to ₹236 crore rising 424% year on year. Stretched valuations blamed.

6) UltraTech Cement jumped 6.67% despite reporting a 17% decline in its consolidated net profit for the October-December quarter to Rs 1,470 crore. (Ultratech’s stock price gained amidst recovering demand from the infrastructure segment).

7) KEI Industries was in limelight, up 3.63% after its net profit for the December quarter climbed 9.4% year-on-year to Rs 164.8 crore, up from Rs 150.6 crore in the corresponding quarter of the previous fiscal. (Revenue also grew nearly 20% to Rs 2,467.2 crore as against Rs 2,059.3 crore in the year-ago quarter).

8) ICICI Prudential Life Insurance dropped 8.5% despite report a 43% jump in third-quarter profit, driven by higher premiums from new policy sales. (The life insurer reported a standalone profit of Rs 326 crore for the quarter ended Dec. 31, compared to Rs 227 crore a year ago).

9) L&T Finance traded sluggish, down 2.34% after its consolidated net profit declined by 2% year-on-year (Y-o-Y) to Rs 626 crore for the quarter ended December 2024 (Q3FY25), reflecting pressure on net interest margins (NIMs) and a rise in impairment costs.

10) Multi Commodity Exchange of India (MCX) dropped 4.89% after reporting earnings with 57% YoY Revenue Growth. MCX reported a net profit of Rs 160 crore for the third quarter that ended December 31, 2024.

11) Kotak Mahindra Bank jumped 7.36% after delivering a steady performance in Q3FY25, as its consolidated profit came at Rs 4,701.02 crore, posting a growth of 10.23%. (It posted total income during the quarter in review at Rs 23,945.79 crore, down 0.57% as against Rs 24,083.15 crore during the third quarter of FY24).

 

# In the week gone by, notable gainers amongst Nifty 50 were:
WIPRO +13.53%
KOTAK MAHINDRA BANK +7.26%
ULTRATECH CEMENT +6.67%
BRITANNIA INDUSTRIES +5.09%
GRASIM +4.84%

# And the losers were:
TRENT (-11.68%)
SBI LIFE (-6.50%)
DR REDDYS LAB (-6.49%)
ADANI PORTS (-5.96%)
TATA MOTORS (-5.85%)

# The Big Question: Can Nifty drop and close below its psychological 23000 mark?.

# Well, Wall Street began Trump’s second term with solid gains.

# The US President promised sweeping moves to reshape global trade and most importantly, to take the booming US economy forward, often at the expense of its trading countries.

# Amidst this backdrop, Nifty and its stocks sobbed, indicating Dalal Street is not yet fully prepared for the potential fallout from proposed Trump tariffs.

# Strictly speaking, Nifty could be headed for a jittery sessions going forward as uncertainty lingers over President Donald Trump’s plans for tariffs.

There is a bright chance that Nifty could drop below the psychological 23000 mark on closing basis as pessimism still continues to be the order of the day.

All bullish hopes now turn towards Union Budget 2025 to be released on February 1st

Well, the Finance Minister Nirmala Sitharaman has now 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.

# The other 2-big catalysts in the near term:

1) The Federal Open Market Committee’s next policy meeting on January 28-29.

2) Delhi Assembly election voting on Feb 5th, results on Feb 8th

*Disclaimer/ Disclosure:* The investments & trading ideas recommended in the market analysis, research reports, etc. may not be suitable for all investors. This article or data points does not construe investment advice as stock market investments are subject to market risks so please refer to your financial consultant advice before Investing or trading. All information is a point of view, and is for educational, Learning and informational use only. The author or the group admin accepts no liability for any interpretation of articles or comments on this platform being used for actual investments. Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors. Investors must make their own investment decisions based on their specific investment objectives, goals and financial position only after consulting with registered market intermediaries.

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