The Indian stock market began the week on a bearish note, with the Nifty 50 index slipping 0.71% to end at 23,644.90, while the S&P BSE Sensex also saw a decline of 0.59%, closing at 78,248.13. The Bank Nifty followed the same trend, losing 0.7% to close at 50,952.75, as most sectoral indices ended in the red, except for Pharma. The broader market also saw mixed results, with mid-cap stocks largely flat, while small-cap stocks ended the day lower, losing around half a percent.
Market experts have pointed out that as long as the Nifty 50 remains below the crucial level of 23,800, weak sentiment is likely to persist. In such a scenario, the indices may retest lower levels of 23,500 to 23,450. However, if the Nifty moves above 23,800, there could be a shift in sentiment, potentially leading to a recovery in the short term.
Srikant Chouhan, Head of Equity Research at Kotak Securities, noted that the market sentiment would remain subdued unless the Nifty surpasses 23,800, which could trigger a change in the overall outlook. Hrishikesh Yedve, AVP of Technical and Derivatives Research at Asit C. Mehta Investment Intermediates, highlighted that the Bank Nifty is likely to trade within the 50,500 to 52,000 range. A breakout in either direction would play a key role in determining its future trend.
The India VIX, a measure of market volatility, surged by 6.4% during the session, signaling heightened uncertainty in the markets. The upcoming release of China’s manufacturing PMI for December is expected to influence market movements globally, making it a crucial economic data point to watch.
In terms of broader market outlook, experts suggest that Indian markets may remain range-bound in the near term due to global uncertainties and weak sentiment. However, Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services, expects consolidation to continue through the first half of 2025. The second half of the year could see a recovery driven by improved corporate earnings and increased government spending.
Overall, the stock market is likely to face some volatility and consolidation in the near term, but there is potential for a recovery in the second half of 2025 if key economic factors align.
