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NIFTY analysis with experts, Indian stock market becomes 7th largest, Indian markets fallback…. Market updates for 24/12/18

PurpleTrades - stock market courses > News > NIFTY analysis with experts, Indian stock market becomes 7th largest, Indian markets fallback…. Market updates for 24/12/18

Report by- Sabyasachi Bhattacharya



Indian stock market becomes 7th largets by mcap; beats Germany-

India’s healthy economic growth has helped its stock market become the seventh largest market by size, with a market capitalisation (mcap) of $2.08 trillion. Its stock market has overtaken that of Germany, Europe’s largest economy, for the first time in seven years, according to Bloomberg. The US dominates the global ranking, with $27 trillion mcap, followed by China, Japan, Hong Kong, UK, France and India. India’s ascent reflects the growing clout of emerging markets. It also indicates its economy is positioned for sustained growth, even if the manufacturing sector is not firing on all cylinders. The BSE Sensex, the broad market benchmark, is up 5 percent in past one year in terms of local currency and down around four percent in US dollar terms, still outperforming MSCI Emerging Market index that declined 17 percent. Mcap, which is the market value of listed firms, typically moves in tandem with economic growth. India’s mcap has room for improvement as India’s mcap-to-GDP ratio at 77 percent is not only below the world average but also below pre-global financial crisis levels of 151 percent. The mcap of Indian equities is likely to hit $6.7 trillion by 2027, according to Morgan Stanley. The most obvious beneficiary of growing mcap is the broking business. However, there are multiple challenges to the broking business, such as increasing competition, an emergence of low/zero cost brokers and falling broking yields. Further, the broking business is volatile which prompts us to look at relatively low-risk proxies for capital market growth which includes exchanges, depositories and asset management companies (AMCs). India is one of the world’s fastest growth engines with GDP likely to touch $5 trillion by 2025, which will be reflected in the performance of its stock markets. Indian exchanges, synonymous to equity markets, will continue to gain scale and depth. In an oligopolistic market, we see BSE as a beneficiary of buoyant capital market conditions. Hence, despite a being distant second in the equities segment, we expect BSE to continue on its growth path as the overall market size increases. India’s asset management industry has seen growing inflows, as investors seek an indirect exposure to equities. Buoyant equity markets are expected to aid this trend of investing through mutual funds. While there are multiple growth drivers including “financialisation of savings” for AMCs inflows into mutual funds are highly contingent on the performance of equity markets.  HDFC AMC and Reliance Nippon AMC (RNAM), being leading listed MF players, will continue to gain from the growth in India’s mcap. Both these AMCs are expected to see continued growth in their equity AUM and profitability.


Source- MoneyControl, Purple Trades Research Department   




Indian markets fallback for the 3rd consecutive day-

Chart source- Upstox

Indian markets had a bearish outing today as the Indian Index Nifty had a Open equals to high opening today after which it started moving downwards slowly. The Index did find a support at the 10,715 level but couldn’t hold it for long and started moving downwards. As you can see on the chart above Nifty had total bearish run today which ended up good for those who shorted Nifty Futures. The bear run continues on D-Street, signaling a possible halt to this Santa rally. The Nify has ended below 10,700, while the Sensex closed with cuts of nearly 300 points. Barring the IT index, all sectoral indices ended in the red, with auto, banks, consumption, energy and metals have closed lower. In the midcaps space, The Nifty Midcap index ended 0.7 percent lower. At the close of market hours, the Sensex was down 271.92 points or 0.76% at 35470.15, while the Nifty was lower by 90.50 points or 0.84% at 10663.50. The market breadth was negative as 908 shares advanced, against a decline of 1,638 shares, while 142 shares were unchanged. Wipro and TCS were the top gainers, while Hero MotoCorp, Bajaj Auto, and JSW Steel lost the most. The market will be shut on Tuesday on account of Christmas.




Let’s take a look at the heat map-


Let’s take a look at the performance of major Indices-

Global markets had a bearish day today. NASDAQ along with Asian Indices such as KOSPI and NIKKEI were all seen in the RED. European Indices CAC and FTSE were seen in the RED. DAX was seen in the GREEN today along with Straits Times

Source- MoneyControl, Purple Trades Research Department   



Key Points for Traders to watch out for while trading Nifty tomorrow-

  • 10,645 is a short term support for Nifty.
  • If Nifty breaks 10,645 then it has the potential to go down.
  • 10,720 is a short term resistance for Nifty.
  • If Nifty breaks 10,720 then it has the potential to go up.
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