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Market Update

• Equity benchmarks Nifty and Sensex dropped by nearly 1% each due to profit booking after a strong rally over the previous two trading sessions. Investors reduced their exposure to bank, pharma, and IT stocks ahead of the upcoming earnings season. Market sentiment was further dampened by a depreciating rupee against the US dollar, weak December PMI data hitting a one-year low, and rising oil prices reaching a three-month high. Additionally, the decline in the US Index and a weak start in European markets, impacted by the US Dollar Index rising to a 26-month high above 109, also weighed on sentiment. This surge in the US Dollar was fueled by expectations that the US Federal Reserve would delay rate cuts following a strong US jobless claims report. The Sensex fell 720 points (0.90%) to close at 79,223, while Nifty dropped 184 points (0.80%) to finish at 24,004. The Nifty IT Index saw a 1.5% decline due to profit booking in stocks like Wipro, Tech Mahindra, TCS, and HCL Tech, which fell by 1-3%. Pharma stocks also faced profit booking, with the Nifty Pharma Index dropping 1.2%. Stocks like Ajanta Pharma, Aurobindo Pharma, Cipla, Dr Reddy’s, Sun Pharma, and Divi’s Lab saw declines between 1.5% to 3.5%. On the other hand, oil & gas stocks attracted fresh buying interest, benefiting from rising oil prices, which hit a three-month high of $76 per barrel. Both ONGC and Oil India gained 5% and 3.5%, respectively, while Reliance advanced by nearly 1% to close at Rs 1,251. Foreign Institutional Investors (FIIs) turned net buyers, purchasing equities worth Rs 1,506.75 crore yesterday after several days of net selling. Meanwhile, the rupee dropped 3 paise to a record low of 85.78

Technical Outlook:

• Nifty index opened flattish but failed to surpass its previous day’s higher zones and slightly drifted lower. It broke 24000 zones during the day but managed to close above the same with losses of around 180 points. It formed a bearish candle on daily frame and has started to form higher lows from the last two sessions. It formed a bullish candle on weekly basis with longer shadows indicating swings and support based buying. Now it has to cross and hold above 24000 zones for an bounce towards 24250 then 24400 zones or a hold below the same could see a downside move towards 23850 then 23750 zones.

Derivative Outlook:

• Nifty future closed negative with losses of 0.86% at 24074 levels. Positive setup seen in Cholamandalam Finance, UPL, REC, IGL, SBI Cards, Jubilant Food works, Bata India, PB Fintech, Union Bank, Titan, APL Apollo Tubes, Lodha and Max Healthcare while weakness in National Aluminium, Delhivery, MCX, Metropolis, Dr. Lal Path Labs, Jindal Stainless, JSW Energy, Crompton, Tata Chemical, and Balkrishna Industries.

• On option front, Maximum Call OI is at 25000 then 24500 strike while Maximum Put OI is at 23000 then 23700 strike. Call writing is seen at 24500 then 24200 strike while Put writing is seen at 23700 then 2400 strike. Option data suggests a broader trading range in between 23500 to 24400 zones while an immediate range between 23700 to 24200 levels.

Godrej Agrovet – Company has launched a new product, Godrej Pride Hog, aimed at boosting pig health and immunity

• NHPC - Company has received order worth Rs 250 crore under the Mega Insurance Policy for the Teesta-V power station loss, as per an exchange filing

• IRFC – Company inked a Memorandum of Understanding (MOU) with REMC to collaborate on financing renewable energy projects awarded by REMCL for supply to Indian Railways – Positive

• Afcons Infrastructure – Company received a work order worth of Rs 1080cr from India’s DRDO

• KPI Green – Company has received a Letter of Award (LoA) for the development of solar power projects with a cumulative capacity of 32.15 MW under the CPP segment,

• KEC International – Company bags order worth Rs1097cr from US and UAE

• Yes Bank Business Q3 Update (YoY) - Loans & advances as of Dec 31 increased by 12.6% to Rs 2.45 lakh crore compared to Rs 2.18 lakh crore. Deposits as of Dec 31 grew by 14.6% to Rs 2.77 lakh crore compared to Rs 2.42 lakh crore. CASA as of Dec 31 increased by 27.6% to Rs 91,575 crore compared to Rs 71,749 crore. CASA ratio as of Dec 31 was 33% compared to 29.7%.

Global Market Update

• European Market - European Index declined tracking overnight losses on Wall Street. US jobless claims declined more than expected, showing resilience of labour market in the world's largest country. This nudged the fear that the Federal Reserve will remain hawkish for longer period. Both Germany and France Index slipped 0.8% and 0.4% respectively.

• Asian Market - Asian markets gained on Friday, bucking retreats on Wall Street as the dollar advanced and markets reopened following the New Year's holiday. Hong Kong, Sydney and Taipei climbed, while Seoul surged nearly two percent higher despite deepening political uncertainty in Asia's fourth-largest economy

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