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Below the Quote on Pre-Market Comment by Mandar Bhojane, Research Analyst, Choice Broking Ltd

The Indian equity markets are expected to open flat to negative today, as indicated by the GIFT Nifty. The past week was range bound due to the lack of major domestic and global triggers amid the year-end holiday season. Persistent concerns, such as consistent foreign institutional investor (FII) outflows, a weakening rupee against the US dollar, and diminishing expectations of interest rate cuts in 2025, weighed on market sentiment. The benchmark indices declined nearly 5% in the preceding week.

The market is likely to remain range bound in the near term, with a focus on the release of Manufacturing PMI numbers and monthly auto sales data. Looking ahead, attention is expected to gradually shift toward December quarter earnings and the Union Budget.

The daily chart for the Nifty 50 index shows an inverted hammer candle, suggesting profit-booking following a recovery from key support levels. Immediate support is positioned at 23,600 and 23,500, which may act as potential reversal zones if confirmed by price action. On the upside, immediate resistance is seen at 24,000. A sustained move above this level could drive the index toward 24,400 and 24,600, unlocking significant upside potential.

The Bank Nifty is trading within a range of 50,700 to 51,800. If the index sustains below the critical 51,000 level, it may test support levels at 50,500 and 50,000. These zones could present buying opportunities if price action indicates a reversal. On the upside, resistance is identified at 51,800 and 52,000. A close above these levels could trigger a rally, propelling the index toward 53,000 and 53,500.

FIIs remained net sellers in December, offloading ?10,444 crore in the cash segment and ?2.97 lakh crore for the year. This trend has been driven by high valuations, a stronger US dollar, and rising bond yields, with continued selling anticipated in early 2025.

Conversely, domestic institutional investors (DIIs) have actively supported the market, purchasing ?10,928 crore in December and ?5.2 lakh crore throughout 2024. Their buying activity has helped cushion the impact of FII outflows, contributing to the market's 9% gain for the year. Experts predict increased DII inflows in 2025, which will be crucial for sustaining market momentum.

Overall, traders should remain cautious and look for confirmation of price action at key levels before initiating fresh positions.

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