GIFT Nifty futures down 40 points; markets to open on a cautious note

Indian equity markets ended the last session of 2024 on a subdued note, with the S&P BSE Sensex slipping by 109.12 points, or 0.14 per cent, to close at 78,139.01. Meanwhile, the Nifty50 finished flat at 23,644.80, marginally down by 0.10 points. Despite the muted close, the benchmark indices posted strong yearly gains, with Nifty rising nine per cent and Sensex advancing eight per cent in 2024.

Sectoral and stock-specific trends
IT stocks led the decline in Tuesday’s session, with additional pressure coming from select banking names. The Nifty Pharma index emerged as the top performer for the year, clocking a stellar forty per cent gain. Broader markets outperformed, showcasing resilience amidst global headwinds.

Crucial levels to watch
Nifty's immediate support lies at 23,500, with a recovery from this level signalling bullish resilience. On the upside, the index faces resistance in the 23,800–24,000 zone. A decisive move beyond this range will set the tone for the next market trend.

In the banking space, the Nifty Bank index remained range-bound, hovering between 50,500 and 51,000. While defending its 200-day simple moving average, the index needs to surpass 51,430 for a positive breakout.

Factors influencing January trends
Historically, January has been a weak month for Indian equities, with losses ranging between 0.3 and 2.5 per cent over the past six years. Investors are keenly watching domestic macroeconomic data like PMI, auto sales figures for December, and the upcoming quarterly business updates. Additionally, global factors such as the US Federal Reserve's meeting later in the month and geopolitical developments will play a critical role.

F&O activity highlights
Fresh long positions were noted in stocks like APL Apollo Tubes and Adani Total Gas, reflecting optimism in specific counters. Conversely, fresh shorts were seen in IRFC and MCX, indicating caution.

As markets step into 2025, the focus will be on earnings season and budget expectations. A clear direction will likely emerge post these key events.