Indian Equity Markets Open Lower on December 2, 2024 Amid Weak GDP Data

Indian equity markets began trading on a cautious note on December 2, 2024, following the announcement of a disappointing Q2 GDP growth figure. The Sensex opened lower by 0.43 percent, a decline of 342.58 points, standing at 79,460.2. Meanwhile, the NSE Nifty index fell by 0.3 percent, or 72.7 points, starting at 24,058.4.

In a volatile trading session, the high beta Nifty Bank index also experienced a decrease, trading down by as much as 0.4 percent.

Sector-wise movements showed that indices related to pharmaceuticals, automobiles, and consumer durables performed well, with the pharmaceutical sector showing the strongest resilience amidst the overall market decline.

Dr. V K Vijayakumar, the Chief Investment Strategist at Geojit Financial Services, commented on the situation by stating that the Q2 GDP surprise of 5.4 percent would likely weigh on market sentiment. However, he noted that the impact on the markets was expected to be limited, as some decline in growth had already been anticipated by investors following previous disappointing Q2 results. Dr. Vijayakumar suggested that if market corrections do occur, they might present a buying opportunity, especially since domestic institutional investors are likely to continue purchasing during market dips.

Prashanth Tapse, Senior VP for Research at Mehta Equities, also highlighted the resilience of domestic investor sentiment. He mentioned that despite the concerns related to weaker GDP growth for Q2 FY25, which recorded a rate of 5.4 percent, and rising retail inflation rates surpassing 6 percent, the market has remained buoyant.

This week, attention will be on the Reserve Bank of India's Monetary Policy Committee (MPC) meeting scheduled for Friday. Many analysts expect a maintenance of current interest rates during this meeting. Additionally, the U.S. non-farm payrolls report is also anticipated to capture market interest.

Asian Market Performance

In parallel, Asian markets reflected some positive movement as seen with the MSCI Asia ex-Japan index, which rose by 0.37 percent. Most Asian markets traded in the green, with Singapore's Straits Times gaining 0.43 percent. Interestingly, these gains occurred in the backdrop of ongoing trade tensions, with the U.S. President threatening 100 percent tariffs against BRICS countries.

Technical Outlook

From a technical perspective, Akshay Chinchalkar, Head of Research at Axis Securities, noted that the Nifty's resurgence on the preceding Friday formed a 'bullish belt-hold' candlestick pattern. This formation often arises when a bullish trading day follows a bearish one, indicating potential market recovery. With Thursday's low of 23,873 being a key level for both bullish and bearish traders, immediate resistance is seen at 24,360, followed by the 24,540 range.

Equities, GDP, Inflation