The Indian stock market opened on December 26, 2024, following the Christmas holiday, with the benchmark indices experiencing a mix of gains and losses throughout the day. Despite initial optimism, analysts suggest the potential for sustained growth may be limited amid various external pressures.
The S&P BSE Sensex opened the day at 78,877.12 points, marking a gain of 404.25 points or 0.52% at 09:23 AM. Meanwhile, the Nifty 50 index started at 23,790.85, rising by 63.20 points or 0.27%. This initial upward movement demonstrated some resilience after the previous session’s flat close, where the Nifty 50 ended at 23,727.65, only slightly down by 25.80 points or 0.11%.
The midday trading session witnessed moderate fluctuations, with the Sensex trading at about 78,636.97, up 164.10 points (0.21%) and the Nifty moving up to 23,790.85, reflecting similar gains of 0.27%. Analysts observed, though, the broader sentiment remained cautious.
According to V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, the current market dynamics are pressured by the strong US dollar and high bond yields, impacting foreign investments. He commented, "The relief rally witnessed yesterday is unlikely to continue... external factors like the strong dollar and high bond yields, combined with internal challenges such as growth and earnings slowdown, will restrain a sustained rally." Such sentiments have investors focusing on safety over potential returns, emphasizing the need for cautious trading approaches.
The market’s mixed performance was reflected across various sectoral indices, with gains seen primarily in the Nifty Auto, Nifty FMCG, Nifty IT, Nifty Media, and Nifty PSU Bank sectors. Notable gainers included stocks like Britannia, TCS, Tata Motors, Nestle India, and Hero Motors. Conversely, the decline was marked by 19 stocks such as JSW Steel, IndusInd Bank, and Shriram Finance which impacted the overall sentiment.
The broader market trends indicated some resilience as the Nifty Smallcap 100 showed gains of 0.22% and the Nifty Midcap 100 also edged up by 0.15%, catering to the interests of long-term investors. These movements suggest potential entry points for buying, especially since the S&P BSE Sensex has encountered nearly 9% decrease from its peak earlier this year.
A significant development on this trading day was Ola Electric, which reported surging shares by up to 6% due to the announcement of expansion to 4,000 stores nationwide, effectively quadrupling their previous count. This expansion strategy aims to solidify the company’s market position and reach for higher sales potential.
On the pharmaceutical front, shares of Panacea Biotec skyrocketed to the upper circuit limit of 5%, following the announcement of receiving an award from UNICEF for the supply of 115 million doses of its bivalent oral polio vaccine. With the value of the contract reaching approximately $14.95 million, this development has sparked optimism among investors.
Meanwhile, broader Asian markets displayed mixed outcomes. Japan's Nikkei 225 and South Korea's KOSPI traded lower, whereas Taiwan's Weighted Index, Hong Kong's Hang Seng, and Indonesia's Jakarta Composite posted marginal gains. Market analysts advised care as the year-end approaches, underscoring the need for strategy amid possible downturns.
Overall, capturing the key trends from December 26 serves as both a snapshot of current investor sentiment and outlook on anticipated market activities heading toward the end of the year. The fluctuations hint at continued caution within trading activities as external factors remain impactful.
Analysts predict the next few trading days will be pivotal. "Investors should approach the market with caution and look for safety rather than simply returns under such volatile conditions," reiterated Vijayakumar, advising traders to stay informed and strategize accordingly. This approach could set the course for market behavior as the year progresses.
