Nifty struggles around the 24,000 mark, amidst valuation worries

3 Jan 2025 , 09:47 AM

NIFTY STRUGGLES AROUND THE 24,000 MARK

FPIs may have been net buyers in equities in December, but that is largely thanks to the deluge of IPOs in the month. If you leave out the primary market flows, FPIs were still net sellers in secondary market equities. The global situation continues to be volatile and there are still key valuation concerns ahead of Q3 results to be announced in India. However, the biggest concern for the markets in December was the lack of buying. Most FPIs are still not too sure of fresh allocations to India and till that happens, markets to remain tentative.

Now for how the Nifty performed in December. As of the close of the year, the Nifty 50 index delivered monthly returns of -2.20% and annual returns of 9.59%. That is relatively subdued compared to the euphoria of 2023. Also, the Nifty index has bounced 14.44% from the peak, showing meaningful resilience. However, the momentum appears to be weak, with the Nifty still about 7.95% short of its recent peak levels.

MOMENTUM RETURNS – NIFTY STOCK RETURNS IN DECEMBER 2024

With Nifty index returns of -2.20% in December 2024, the losers got the better of gainers. Out of the 50 stocks in the Nifty, only 15 stocks gave positive returns while 35 stocks gave negative returns in December 2024. Here are the top-15 on monthly returns.

Stock Symbol	Market Price	1-Month Return	1-Year Return	52-week High	52-week Low	Bounce from Low	Distance to High
DRREDDY	1,373.00	12.05	-76.90	1,421.49	1,104.13	24.35%	3.41%
SUNPHARMA	1,874.10	4.50	45.81	1,960.35	1,257.15	49.08%	4.40%
APOLLOHOSP	7,405.10	4.30	28.25	7,545.00	5,640.00	31.30%	1.85%
BAJFINANCE	7,373.60	4.28	-6.66	7,830.00	6,187.80	19.16%	5.83%
ADANIENT	2,587.85	3.98	-12.88	3,743.90	2,025.00	27.80%	30.88%
TRENT	7,296.35	3.86	135.98	8,345.00	2,940.75	148.11%	12.57%
M&M	3,203.00	2.17	86.09	3,228.10	1,575.00	103.37%	0.78%
HCLTECH	1,966.45	2.16	30.10	1,980.00	1,235.00	59.23%	0.68%
KOTAKBANK	1,834.05	1.96	-4.11	1,942.00	1,543.85	18.80%	5.56%
CIPLA	1,535.00	1.42	19.32	1,702.05	1,252.10	22.59%	9.81%
ITC	489.50	1.41	2.89	528.50	399.35	22.57%	7.38%
EICHERMOT	5,303.00	1.34	25.51	5,330.00	3,562.45	48.86%	0.51%
BPCL	295.90	0.39	-35.28	376.00	222.55	32.96%	21.30%
ADANIPORTS	1,225.00	0.24	13.01	1,621.40	995.65	23.04%	24.45%
INFY	1,954.75	0.14	22.69	2,006.45	1,358.35	43.91%	2.58%

Data Source: NSE

Which are the sectors that showed momentum in the last one month? The top 15 stocks had 4 healthcare stocks, and 2 each from Financials, FMCG, and IT. In a tough month, healthcare stocks were the quiet stars. If you look at the bottom 15, some of the heavyweights found themselves in the list including Reliance, SBI, and ONGC. The top 10 stocks gave average monthly return of 4.07% while the top 20 stocks averaged 1.95% for December 2024.

LONGER TERM RETURNS – NIFTY STORY FOR YEAR TO 2024

The 1-month returns may be too loaded in favour of short term triggers and a more stable and reliable output will be available if we look at 1-year returns. Nifty index generated annual returns of 9.59%. Out of the 50 stocks in the Nifty 50 index, 28 stocks gave positive returns and 22 stocks gave negative returns in last one year. Here are the top-15.

Stock Symbol	Market Price	1-Month Return	1-Year Return	52-week High	52-week Low	Bounce from Low	Distance to High
TRENT	7,296.35	3.86	135.98	8,345.00	2,940.75	148.11%	12.57%
M&M	3,203.00	2.17	86.09	3,228.10	1,575.00	103.37%	0.78%
BEL	296.30	-4.24	61.35	340.50	171.75	72.52%	12.98%
BHARTIARTL	1,613.00	-2.91	56.18	1,779.00	1,016.00	58.76%	9.33%
SUNPHARMA	1,874.10	4.50	45.81	1,960.35	1,257.15	49.08%	4.40%
SHRIRAMFIN	3,051.00	-5.67	43.77	3,652.25	2,016.00	51.34%	16.46%
TECHM	1,723.00	-2.41	33.31	1,807.70	1,162.95	48.16%	4.69%
BAJAJ-AUTO	9,062.00	-4.27	31.14	12,774.00	6,560.95	38.12%	29.06%
ICICIBANK	1,291.00	-1.61	30.68	1,362.35	970.15	33.07%	5.24%
POWERGRID	315.05	-5.32	30.50	366.25	226.05	39.37%	13.98%
HCLTECH	1,966.45	2.16	30.10	1,980.00	1,235.00	59.23%	0.68%
APOLLOHOSP	7,405.10	4.30	28.25	7,545.00	5,640.00	31.30%	1.85%
EICHERMOT	5,303.00	1.34	25.51	5,330.00	3,562.45	48.86%	0.51%
SBIN	802.25	-5.16	24.04	912.00	600.65	33.56%	12.03%
INFY	1,954.75	0.14	22.69	2,006.45	1,358.35	43.91%	2.58%

Data Source: NSE

Which sectors showed best long term returns in last 1 year? The top 15 stocks had 3 IT companies, 3 auto stocks, and 3 financial sector plays. The rest were spread out. If you look at the bottom 15, it was dominated by financials and FMCG stocks. Reliance found itself in the bottom after correcting a full 24% from the peak levels. The top 10 stocks gave average annual return of 55.48% while the top 20 stocks averaged 38.03% for the year 2024.

 

NIFTY RESILIENCE SCORE IN DECEMBER 2024

A proxy for resilience is the extent of bounce from the 52-Week lows. For the Nifty index, the bounce from the low of the year was 14.44%. Out of the 50 stocks in the Nifty, 2 stocks bounced more than 100% from the lows, while 6 stocks bounced over 50% from the lows.

Stock Symbol	Market Price	1-Month Return	1-Year Return	52-week High	52-week Low	Bounce from Low	Distance to High
TRENT	7,296.35	3.86	135.98	8,345.00	2,940.75	148.11%	12.57%
M&M	3,203.00	2.17	86.09	3,228.10	1,575.00	103.37%	0.78%
BEL	296.30	-4.24	61.35	340.50	171.75	72.52%	12.98%
HCLTECH	1,966.45	2.16	30.10	1,980.00	1,235.00	59.23%	0.68%
BHARTIARTL	1,613.00	-2.91	56.18	1,779.00	1,016.00	58.76%	9.33%
SHRIRAMFIN	3,051.00	-5.67	43.77	3,652.25	2,016.00	51.34%	16.46%
SUNPHARMA	1,874.10	4.50	45.81	1,960.35	1,257.15	49.08%	4.40%
EICHERMOT	5,303.00	1.34	25.51	5,330.00	3,562.45	48.86%	0.51%
TECHM	1,723.00	-2.41	33.31	1,807.70	1,162.95	48.16%	4.69%
WIPRO	303.00	-48.63	-36.00	320.00	208.50	45.32%	5.31%
INFY	1,954.75	0.14	22.69	2,006.45	1,358.35	43.91%	2.58%
POWERGRID	315.05	-5.32	30.50	366.25	226.05	39.37%	13.98%
BAJAJ-AUTO	9,062.00	-4.27	31.14	12,774.00	6,560.95	38.12%	29.06%
SBIN	802.25	-5.16	24.04	912.00	600.65	33.56%	12.03%
ICICIBANK	1,291.00	-1.61	30.68	1,362.35	970.15	33.07%	5.24%

Data Source: NSE

Which sectors showed best resilience in last 1 year? The top 15 stocks had 3 IT stocks, 3 auto stocks, and 3 PSU plays. If you look at the bottom 15, it was dominated by FMCG stocks (Nestle, Britannia, Asian Paints, Tata Consumer, Hindustan Unilever, Titan) and Reliance Industries was one of the stocks that lagged the rankings. The top 10 stocks gave average bounce of 68.47% while the top 20 stocks averaged 51.17% for year 2024 from yearly lows.

SWING STORY – HOW CLOSE ARE NIFTY STOCKS TO YEARLY HIGHS?

Swing measures the distance of the stock price to the yearly high. Lower the gap, higher the swing factor, and vice versa. Nifty had a modest swing factor of 7.95%. Out of the 50 stocks in the Nifty, only 11 stocks are less than 5% away from their 52-week highs, while a total of 19 stocks are less than 10% away. Swing has deteriorated in recent months.

Stock Symbol	Market Price	1-Month Return	1-Year Return	52-week High	52-week Low	Bounce from Low	Distance to High
EICHERMOT	5,303.00	1.34	25.51	5,330.00	3,562.45	48.86%	0.51%
HCLTECH	1,966.45	2.16	30.10	1,980.00	1,235.00	59.23%	0.68%
M&M	3,203.00	2.17	86.09	3,228.10	1,575.00	103.37%	0.78%
APOLLOHOSP	7,405.10	4.30	28.25	7,545.00	5,640.00	31.30%	1.85%
INFY	1,954.75	0.14	22.69	2,006.45	1,358.35	43.91%	2.58%
ULTRACEMCO	11,763.80	-1.73	12.17	12,145.35	9,250.00	27.18%	3.14%
DRREDDY	1,373.00	12.05	-76.90	1,421.49	1,104.13	24.35%	3.41%
SUNPHARMA	1,874.10	4.50	45.81	1,960.35	1,257.15	49.08%	4.40%
HDFCBANK	1,792.35	-1.22	4.92	1,880.00	1,363.55	31.45%	4.66%
TECHM	1,723.00	-2.41	33.31	1,807.70	1,162.95	48.16%	4.69%
ICICIBANK	1,291.00	-1.61	30.68	1,362.35	970.15	33.07%	5.24%
WIPRO	303.00	-48.63	-36.00	320.00	208.50	45.32%	5.31%
KOTAKBANK	1,834.05	1.96	-4.11	1,942.00	1,543.85	18.80%	5.56%
BAJFINANCE	7,373.60	4.28	-6.66	7,830.00	6,187.80	19.16%	5.83%
LT	3,706.80	-0.99	6.67	3,963.50	3,175.05	16.75%	6.48%

Data Source: NSE

Which sectors showed best swing in last 1 year? The top 15 stocks had 4 Financials, 3 IT stocks and 3 Healthcare stocks; while the rest were spread out.  If you look at the bottom 15 by swing, it was dominated by auto and FMCG stocks. The top 10 stocks had an average swing of 2.67% while the top 20 stocks averaged 5.14% for December 2024. The recent correction has reduced the proximity to the yearly highs.