The domestic stock market started on a subdued note on Friday, with benchmark indices Nifty 50 and Sensex opening without significant movement. The Nifty 50 index opened at 23,960.70 points, reflecting a slight gain of 9 points, while the Sensex rose by 0.15% to start at 79,335.48 points.
Market sentiment was impacted by foreign institutional investors (FIIs) reversing their buying momentum, and the declining Indian rupee added pressure. Analysts pointed to the unexpected pause in the US Federal Reserve rate-cutting cycle as a global market concern, with its implications being felt in the Indian stock market as well. Despite this, there is still hope for a potential rally before the year-end. However, selling by foreign portfolio investors (FPIs) is preventing the market from gaining solid traction.
FII Impact on Market Sentiment
Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, highlighted that FII purchases observed in early December have been reversed, with sales amounting to ₹12,229 crore this week. This shift is putting pressure on large-cap stocks, particularly in the financial sector. However, Vijayakumar believes this trend will be short-lived, suggesting that retail investors might consider positioning themselves against the actions of the FIIs. A recovery driven by large-cap stocks is expected in the near future.
Technical Outlook for Nifty 50
Rajesh Palviya, SVP – Technical and Derivatives Research at Axis Securities, noted that the Nifty 50 index has been consolidating within a range of 24,800-23,800 over the past four weeks, indicating a short-term sideways trend. The crucial support zone remains at 23,826, with resistance around the 24,200-24,400 levels. A breach below 23,800 could lead to further weakness towards 23,500-23,300.
Stock Recommendations
- E.I.D Parry (India) Ltd (CMP: ₹987)
The stock is in a strong uptrend, hitting an all-time high of ₹997. Well above its key moving averages, it shows a bullish trend with rising volumes and positive RSI indicators. Investors are advised to buy, hold, and accumulate, with an expected upside of ₹1,085-1,150 and downside support around ₹935-920. - AGI Greenpac Ltd (CMP: ₹1,280)
This stock has broken past its “rounding bottom” formation, signaling a positive bias. With strong technical indicators, including rising volumes and favorable RSI, investors are advised to buy, hold, and accumulate, with an expected upside of ₹1,500-1,585 and downside support at ₹1,150-1,100.
Market Outlook
While foreign investor actions and global economic factors continue to impact market dynamics, certain stocks, especially those in strong uptrends like E.I.D Parry and AGI Greenpac, present promising opportunities for investors. The coming weeks may see a potential rebound in the market, driven by large-cap stocks, particularly in the financial sector.
The market performance will depend heavily on the FII strategy and broader economic signals in the short term.
