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Broader market outperformance to get amplified, eyes set on Fed meet outcome!

ICICIdirect Research 13 Dec 2024 DISCLAIMER

The fag end buying demand helped index to recover lost ground and settled the week on a positive note at 24750, up 0.3% amid expectation of US Fed rate cut. In the process, small cap index recorded fresh All Time High

What to expect: Despite elevated volatility Nifty managed to hold last week's low of 24000 and staged a strong rebound. We maintain our positive stance and expect Nifty to resolve higher towards 25200 while unfolding Santa rally. Hence, focus should be on accumulating quality stock on dips as support base is now revised upward at 24200

Heavy weight sectors to drive next leg of up move: Nifty IT endured its record setting spree over second consecutive week while Bank Nifty bounced after retesting two-month range breakout area. Cumulatively both sector carries 50% weightage in Nifty  

Broader market in focus: Ratio chart of Nifty 500 / Nifty 100 recorded breakout from 6 months consolidation, suggesting broader market to outperform going ahead.

Structure: Elongation of rallies followed by slower pace of retracement amid improving market breadth indicates robust price structure. Buying on dips would be the prudent strategy to adopt

Key Monitorable for next week:

  • US Federal meet outcome
  • Dollar index is heading towards key resistance of 108

On the sectoral front, we remain positive on BFSI, IT, PSU, Capital Goods & Infra while Defense, Consumer Discretionary offers bargain buy opportunity

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