Shares may climb at opening bell

GIFT Nifty:

The GIFT Nifty January 2025 futures contract is currently up 58 points, indicating a positive start for the Nifty 50.

Institutional Flows:

Foreign portfolio investors (FPIs) sold shares worth Rs 4,227.25 crore, while domestic institutional investors (DIIs) were net buyers to the tune of Rs 820.60 crore in the Indian equity market on 3 January 2025, provisional data showed.

According to NSDL data, FPIs have sold shares worth Rs 4309.93 crore (so far) in the secondary market during January 2025. This follows their sale of shares worth Rs 2589.63 crore in December 2024.

Global Markets:

The Dow Jones index futures were down 57 points, signaling a mildly negative opening for U.S. stocks today.

Asian equities traded mixed on Monday, following a positive close on Wall Street where major indices snapped a five-day losing streak, buoyed by renewed demand for technology stocks.

China's services sector expanded in December at the fastest pace in seven months, driven by robust domestic demand. The Caixin services PMI surged to 52.2, exceeding both market expectations of 51.4 and the November reading of 51.5.

In South Korea, a court dismissed an appeal by lawyers of impeached President Yoon Suk Yeol against an arrest warrant, according to a local media report Sunday.

Investor sentiment remains mixed after a turbulent end to 2024. While anticipated monetary policy easing and the potential of artificial intelligence to drive growth remain supportive factors, the threat of escalating US-China trade tensions could derail any market rally. Investors are also closely monitoring Beijing for further stimulus measures.

US tech stocks staged a strong rebound on Friday, recovering from the losses seen in the final week of 2024. Investors had capitalized on the year-end rally, a period often characterized by positive market movements known as the "Santa Rally."

On Friday, the Dow Jones Industrial Average rose 0.8% to 42,732.13, the S&P 500 gained 1.3% to 5,942.47, and the NASDAQ Composite surged 1.8% to 19,621.68.

This week will feature a shortened trading schedule as the New York Stock Exchange will be closed on Thursday to honor the passing of former President Jimmy Carter.

The minutes from the Federal Reserve's December 17-18 meeting, scheduled for release on Wednesday, will provide further insights into the Fed's interest rate outlook. Recent statements have indicated a more cautious approach to rate cuts this year due to persistent inflation and a resilient economy.

The US December jobs report is due on Friday.

Domestic Market:

The domestic equity indices witnessed a sharp decline on Friday, ending a two-day winning streak. After a flat opening, the Nifty traded within a narrow range before closing near its intraday low at 24,005 points. The sell-off was primarily driven by weakness in IT, pharma, and banking stocks. Investors displayed caution ahead of the upcoming Q3 earnings season, which is set to begin next week. However, sectors such as media, oil & gas, and consumer durables bucked the trend and witnessed strong demand.

The S&P BSE Sensex dropped 720.60 points or 0.90% to 79,223.11. The Nifty 50 index slipped 183.90 points or 0.76% to 24,004.75.

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