"Low US Inflation - 100 Pts Gap UP " Pre Market Report, Analysis, Nifty & Bank Nifty, 16 Jan 2025

Summary

In today's market update (16th June 2025), we cover key global and Indian financial news. The US saw a positive market reaction after better-than-expected inflation data and strong earnings from major banks. India's trade deficit narrowed significantly, boosting investor sentiment. Earnings previews for Reliance, Infosys, and Axis Bank suggest growth, with Reliance seeing strong profit expectations due to improved refining margins. Technical analysis indicates resistance levels for Nifty and Bank Nifty. We also discuss key upcoming economic data from the UK and US, and stock movements to watch, including Reliance, Infosys, and L&T.

Takeaways

• 😀 US consumer inflation data for December shows a 2.9% increase in overall inflation and 3.2% in core inflation, better than expected for core inflation.
• 😀 Positive market reaction to US inflation data as 10-year bond yields dropped to 4.65% from over 4.8%, contributing to gains in US markets.
• 😀 US big banks like JP Morgan, Goldman Sachs, and Wells Fargo reported better-than-expected quarterly earnings, boosting their stock prices by 2-7%.
• 😀 The US crude oil price saw a modest 2% increase due to higher oil demand, influenced by geopolitical factors, including a ceasefire agreement between Israel and Gaza.
• 😀 India's trade deficit narrowed in December to $22 billion, down from $38 billion in November, which is a positive signal for the economy.
• 😀 Reliance Industries' expected earnings include a 2.6% rise in revenue and a 13.5% increase in net profit, driven by improved GRM and telecom tariff hikes.
• 😀 Infosys' earnings are projected to show an 8% revenue growth and a 4.3% profit increase, with market guidance of 4-4.5% revenue growth.
• 😀 Axis Bank is expected to report a 10% increase in revenue and a 5.6% rise in net profit, with no significant deterioration in its net assets.
• 😀 Nifty is expected to open with a gap up and faces resistance at 23,300, with support at 23,000. A break below 23,000 could lead to a fall towards 22,800.
• 😀 Bank Nifty shows a similar pattern to Nifty, with resistance at 49,000 and support at 47,900. A breakout above resistance could lead to further gains.
• 😀 Key upcoming economic data includes UK GDP, German inflation, US retail sales, and weekly jobless claims, which could influence market movements.

Q & A

What were the key takeaways from the US inflation data released for December?

The US inflation data showed a 2.9% increase in overall inflation and a 3.2% increase in core inflation for December. While the overall inflation was in line with expectations, core inflation was better than anticipated, which was seen positively by the market.

How did the US bond yield react to the inflation data?

The 10-year US bond yield dropped to 4.65%, down from above 4.8%, in response to the better-than-expected core inflation data, which contributed to positive market sentiment.

Which US banks posted better-than-expected earnings, and how did the market respond?

US banks such as JP Morgan, Goldman Sachs, Wells Fargo, and BlackRock reported better-than-expected earnings, leading to a positive market reaction, with their stocks rising between 2% to 7%.

What was the trend in oil prices following the US crude inventory data?

US crude inventories showed a decrease, suggesting higher demand for oil, which resulted in a 2% increase in oil prices. However, this increase was limited, with US crude trading at $79 per barrel and Brent crude at $82.5 per barrel.

What is the significance of India's trade deficit narrowing in December?

India's trade deficit narrowed to $22 billion in December from $38 billion in November, which is a positive sign for the Indian Rupee. A smaller trade deficit helps India manage its balance of payments more effectively.

What are the earnings expectations for Reliance Industries in this quarter?

Reliance is expected to show a 2.6% increase in revenue and a 13.5% increase in net profit. The profit boost is primarily driven by an improvement in Singapore GRM (Gross Refining Margin) and a tariff hike in their Geo business.

How are Infosys earnings expected to perform in the upcoming quarter?

Infosys is expected to report an 8% increase in revenue and a 4.3% increase in net profit. The market is also anticipating a narrow revenue guidance of 4% to 4.5% and details on the company's hiring and wage hikes.

What are the expectations for Axis Bank's earnings in this quarter?

Axis Bank is expected to report a 10% increase in revenue and a 5.6% rise in net profit. The market is also focusing on the bank's net interest margin, expected to be between 3.8% and 4%, and its asset quality.

What did the market data indicate about the likely opening for Nifty and Bank Nifty on 16th June 2025?

The GIFT Nifty indicated a gap-up opening of 100-150 points, supported by positive global cues and improved domestic macro data. Both Nifty and Bank Nifty are expected to open higher, with key resistance levels at 23,300 for Nifty and 49,000 for Bank Nifty.

What did the options data suggest about the immediate support and resistance levels for Nifty?

According to the options data, Nifty may face immediate resistance at the 23,300 level, with support at 23,000. If Nifty opens above 23,300, the next resistance would be at 23,500.