Trade Set Up and Nifty Outlook for Tomorrow 14th Jan 2025:Indian stock market indexes ended lower for the fourth consecutive session on Monday. The Sensex and Nifty fell over 1% on Monday as a sharp sell-off was witnessed across all sectors, with the Real Estate, Media, Energy, and Financial sectors falling the most.
Market sentiments were hit following negative global sentiments. The Asian markets declined after the release of strong US job data last Friday, which smashed hopes for imminent interest rate cuts by the Fed. The sentiments were subdued as the Indian currency hit an all-time low against the US dollar.
Sensex and Nifty Today
The BSE Sensex declined 1048.90 points or 1.36% to 76330.01, while the Nifty 50 index plunged 345.55 points or 1.47% to 23085.95. The broader markets underperformed the benchmarks, as the Nifty Midcap index declined by 4.02%, while the Nifty Smallcap index tumbled by 4.10% in the first trading session of the week.
Heavyweights, Adani Enterprises, HDFC Bank, and ICICI Bank were major drags on Monday. The market breadth was weak. On the NSE, 211 shares advanced while 2199 shares declined. The NSE’s “ India VIX” volatility index surged 7.25% to 16. FIIs were the net sellers, they offloaded shares worth Rs 4892.48 cr, while the DIIs bought shares worth Rs 8066.07 cr in the Indian markets.
Indian Economic News
As per the data released on Friday, 10th Jan 2025 post-market, the country’s Industrial growth reached a six-month high of 5.2% in November 2024, up from 3.7% in October, marking the third consecutive month of expansion. The mining, manufacturing, and electricity sectors posted growth rates of 1.9%, 5.8%, and 4.4%, respectively. The positive IIP data failed to influence the markets on Monday.
At the same time, India’s foreign exchange reserves dropped by $5.7 billion, settling at $634.59 billion for the week ending January 3, according to data released by the RBI on Friday also hit the market sentiments.
Trade Set Up and Nifty Outlook for Tomorrow
CPI Eases to 5.22%, But Risks Remain: Indian market will react to inflation data tomorrow. India’s CPI inflation dropped to 5.22% in December 2024 from 5.48% in November, driven by easing food prices and favorable seasonal trends. Food inflation fell to 8.39%, with significant price drops in vegetables like tomatoes (-15%) and onions (-12%). Core inflation stayed low at 3.6%, signaling limited broad inflationary pressures.
However, edible oil inflation surged by 14.6% YoY due to customs duty hikes and a weaker rupee, which hit a record low of 86.58/USD. Global trade risks under U.S. tariff policies could pose future challenges, though India’s reliance on non-tradables minimizes immediate impact.
The RBI expects inflation to average 4.8% in FY25. With growth slowing (GDP at 5.4% in Q2 FY25), the MPC is likely to cut the repo rate by 25 bps in February. Favorable agriculture conditions should help keep FY26 inflation stable at 4.3%-4.7%.
According to Jatin Gedia – Technical Research Analyst at Mirae Asset Sharekhan, Nifty has broken below the November 2024 low of 23263 on the daily chart, suggesting further weakness in the Nifty index.
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