WEEKLY WISDOM

WEEKLY WISDOM

WORLD EQUITES WRAP-UP LAST FULL WEEK OF SOLID 2024 WITH MODEST GAINS

WORLD MARKETS

World equities ended last full but holiday shortened week of calendar 2024 with modest gains.

For the week, Dow inched up 0.4%, breaking a three-week losing streak. S & P 500 and Nasdaq gained 0.7% and 0.8% respectively. European markets gained 0.5%-1.1%. In Asia, Nikkei surged 4.1%, Hang Seng climbed 1.9% while Shanghai and Nifty rose 1% each.

U.S. 10-year treasury yield rose 10 bps, rising for the third consecutive week and hitting their highest level since April 2024. Dollar index rose a fifth of a percent, rising for the fourth consecutive week and scaling 2-year high. Oil saw modest gains.

For the year, Dow has gained 14% while S & P 500 and Nasdaq are up 25% and 31% respectively.

Now let's have a look at the week's activity day-by-day.

On Monday, U.S. indices gained 0.2%-1%. The Conference Board’s consumer confidence index for December fell to 104.7, its lowest level since September and below estimate of 113.0. Orders for durable goods fell 1.1% in November, the largest month-over-month drop since June.

On Tuesday, U.S. indices surged 0.9%-1.4% led by technology stocks.

World markets were shut on Wednesday for Christmas.

On Thursday, Dow ended marginally in the green while S & P 500 and Nasdaq ended slightly below the flatline. Weekly jobless claims totaled 219,000, compared to estimate of 225,000. However, continuing claims, or recurring applications for unemployment benefits, rose to 1.91 million, reaching the highest level since Nov. 13, 2021. U.S. retail sales rose 3.8% between Nov. 1 and Dec. 24.

On Friday, U.S. indices fell 0.8%-1.5% led by technology names. Dow snapped a five-day winning streak.

Revised figures showed the U.K. economy flatlined in the third quarter of the year, with GDP growing 0% in the three months to September. German President Frank-Walter Steinmeier dissolved the country’s parliament on Friday to pave the way for elections in February, after Chancellor Olaf Scholz’s coalition government was ousted earlier this month.

The World Bank on Thursday raised its forecast for Chinese economic growth in 2024 and 2025. Meanwhile, Chinese authorities have agreed to issue special treasury bonds worth 3 trillion yuan ($411 billion) next year, as Beijing acts to revive the sluggish economy.

AT HOME

After previous week's drubbing, bulls tried to make some come back in the week gone by as Nifty managed to gain a percent in the 4-session truncated week. Nifty mid-cap and small-cap indices inched up 0.1% and 0.2% respectively. Nifty Auto and Pharma indices gained 2.3% and 2.2% respectively, becoming top gainers among the sectoral indices while Media and Metal indices were the top losers, down 1.8% and 1%

respectively.

FIIs net sold stocks and index futures worth Rs 4564 cr and 4626 cr respectively but net bought stock futures worth Rs 12882 cr. DIIs were net buyers to the tune of Rs 10928 cr.

Rupee depreciated 0.6% to end the week at $85.53.

OUTLOOK

Trading activity is likely to be thin as the year winds down and new year begins next week. However, there will be economic data to track as new months begins.

Movement in U.S. treasury yield will continue to be watched. The 10-year Treasury yield has risen more than 40 basis points in December as markets anticipate a more hawkish Federal Reserve in 2025.

Geopolitical tensions will also be in focus. NATO said on Friday it would boost its presence in the Baltic Sea, a day after Finland seized a ship carrying Russian oil on suspicion of causing internet and power cable outages. Tensions have flared in the Middle East too, after Israel raided a north Gaza hospital on Friday and struck targets linked to the Houthi movement in Yemen on Thursday.

Economic data to eye from the U.S. include Chicago PMI and Pending home sales on Monday, S & P Global manufacturing PMI, weekly jobless claims and construction spending on Thursday and finally ISM manufacturing PMI on Friday.

Eurozone HCOB manufacturing PMI will be out on Thursday which will be followed by German unemployment rate on Friday. In the UK, nationwide HPI will be released on Wednesday, followed by S&P Global/CIPS UK Manufacturing PMI on Thursday.

China's manufacturing and non-manufacturing PMI will be out on Tuesday while Caixin manufacturing PMI will be released on Thursday.

At home economic data and auto sales numbers will be key things to eye along with foreign and domestic flows and other global cues.

India's November federal fiscal deficit data will be out on Tuesday which will be followed by HSBC India December manufacturing PMI on Wednesday. Auto companies will report their December sales figures on Wednesday.

Taking cues from the charts, 23939, the top made on Friday, is the immediate hurdle on the hourly chart, upon crossover of which, 34-DMA and 20-DMAs, placed around 24100 and 24280 respectively, would be next upside targets to eye. On the way down, double-bottom made at 23650 during the week, is the immediate support, upon breach of which 23537, followed by 23263, the bottoms made on 20th December and 21st November respectively, would be next downside levels to eye. Meanwhile, trading shorts can be held on to with the stop-loss of 23939.