Nifty snapped its four-session losing streak on Friday but still closed the week with a decline of 0.3%. Trading activity is expected to remain subdued across major global markets due to the extended Christmas holiday, even as Indian markets will be shut for just one day on Thursday, December 25. However, when domestic markets resume trading on Monday, a host of key events lined up through the week are likely to influence sentiment.
On Friday, Nifty closed 150.85 points or 0.58% higher to end the day at 25,966.40.
Osho Krishan, Chief Manager – Technical and Derivative Research at Angel One, recommends investors to remain pragmatic until there is greater clarity regarding prevailing trends. While Nifty ended positive on Friday, the index is encountering constraints in making substantial moves, which is evident by the inside bar formation on the weekly chart, he said.
“The challenges near the 20 and 50 DEMA levels have been prominent, though the index has recently surpassed the 20 DEMA. We remain cautious as we are not yet fully cleared of potential obstacles,” he warned, suggesting that focus on the key thematic drivers amid current sectoral fluctuations.
1.Global market cues
Action is expected to remain subdued as major markets will go on an extended holiday. US markets will go for an early break on December 24 and resume trading on December 26.
Markets in Germany will be closed for the full day on December 24 and 25, while those in the UK, France and Australia will see early close on December 24.
Some countries will observe market holidays even on December 26 including the UK, Germany, France, Australia, Canada on account of Boxing Day. Hong Kong will be closed for an extended Christmas holiday.
Domestic and global markets are likely to take their signals from US markets. The Friday cues remain positive with major indices on Wall Street ending with strong gains. The Nasdaq Composite closed at 23,307.60, up 0.38 points, 1.31%. Meanwhile, Dow 30 ended the session at 48,134.90, gaining 183.04 points or 0.22% and the S&P 500 settled at 6,834.50, up by 59.74 points or 0.88%.
2.BSE indices rejig
InterGlobe Aviation and Tata Motors will be in focus on Monday as the former will trade as the newest Sensex member, while Tata Motors Passenger Vehicles will be removed following its recent demerger and the resulting change in market standing.
The BSE 500 index will also see a major overhaul where 32 new stocks will be added, replacing as many scrips. The changes will become effective on December 22 and are part of the semi-annual reconstitution based on the stocks’ market capitalisation, free-float and liquidity, among other things.
The other indices that will be reconstituted include BSE 100, BSE Sensex 50 and BSE Bankex.
3. FII / DII action
While action from Foreign Institutional Investors (FIIs) remains a critical factor for domestic markets, it is expected to remain lean in light of the Christmas holiday. Domestic Institutional Investors (DII) are likely to take the center stage.
In a positive development, FIIs have turned net buyers for the past three sessions, and on Friday, they bought Indian equities to the tune of Rs 1,830.89 crore. Meanwhile, the DIIs purchased shares worth Rs 5,722.89 crore.
4. IPO watch
Plenty of action is expected in the primary markets with 11 issues hitting the Street this week. Together, they will raise Rs 750 crore.
In this, there is a lone mainboard IPO of Gujarat Kidney & Super Speciality, which opens for bidding on Monday. The company has set the price band at Rs 108-114.
The SME IPOs to be launched this week include Apollo Techno Industries, Bai Kakaji Polymers, Admach Systems, Nanta Tech, Dhara Rail Projects, Sundrex Oil, Shyam Dhani Industries, Dachepalli Publishers and EPW India. The issue size in the SME basket ranges from about Rs 31 crore to just over Rs 105 crore.
Moreover, there will be 5 IPO listings with KSH International the only mainboard listing among them.
Also Read: IPO calendar: 11 companies to raise Rs 750 crore next week as Gujarat Kidney takes centre stage
5. Anchor lock-in expiry
Anchor-lock-ins in 11 stocks will expire this week, making their shares available for sale. In this, 10 stocks will see their three-month mandatory holding period end. These include VMS TMT, Ivalue Infosolutions, Saatvik Green Energy, GK Energy, Ganesh Consumer Products, Atlanta Electricals, Solarworld Energy Solutions, Seshaasai Technologies, Jaro Institute of Technology, and Anand Rathi Share and Stock Brokers.
For Arisinfra Solutions, the six-month lock-in opens on Friday.
6. Technical factors
Centrum Broking’s Nilesh Jain highlights the formation of Doji candle on the Nifty weekly chart that suggests weakness and indecision. The Head of Technical & Derivatives Research said that the index found support at its 50-DMA during the week and recovered to close above the 25,900 level.
He sees an immediate hurdle near the 21-DMA at 26,000 and expects a sustained move above this zone could lead to short covering, potentially lifting the index towards 26,200. “Given the recent rebound and a breakout above the falling trend line, a Santa rally in the coming week looks possible, which may propel the Nifty towards the 26,200 mark. On the downside, key support is positioned around 25,700. Additionally, India VIX is hovering near multi-month lows around 9.60, which is likely to offer some reassurance to bullish sentiment,” Jain said.
7. Rupee Vs dollar
The rupee revival against the dollar was a key takeaway for domestic markets on Friday as it gained 97 paise or over 1%, to close at 89.27. It slipped below 91 to a dollar for the first time ever during the week gone by.
INR’s performance is expected to be a key trigger in the absence of major global indicators.
A likely intervention by the Reserve Bank of India (RBI) at the fag end of Friday’s trade helped the currency gain sharply, multiple experts tracking the market said. Before that, the rupee traded between 89.95 and 90.30. It opened at 90.13 against Thursday’s close of 90.24 a dollar.
“A possible intervention by the RBI just five minutes before market close brought the rupee to close strong at 89.27. Being a very thin market before the year-end, any small volume creates volatility in the currency market, which exactly happened today from 3.25 p.m. to 3.30 p.m,” ET reported, quoting KN Dey, a veteran forex market consultant.
Meanwhile, the one-year forward premium rose to 2.84%, the highest since October 2022, due to high hedging demand.
“With the RBI likely engaging in proactive intervention, the short-term outlook for USDINR has turned bearish,” he said.
8. Corporate action
A clutch of stocks will be in focus this week on account of corporate actions. Monday, December 22, will be a record date for the interim dividend of Canara Robeco Asset Management Company. It will also be a record date for the 1:2 stock split of Knowledge Marine & Engineering Works and the rights issue of Pulsar International.
Tuesday will be a record date for rights issues of Vineet Laboratories and Yug Decor.
GRM Overseas and Nectar Lifesciences will have record dates for 2:1 bonus issue and buyback of shares, respectively on Wednesday. It will also be the record date for Prakash Pipes’ Re 1 per share dividend.
Friday will be the record date for the 1:2 stock split of Nuvama Wealth Management and 1:1 bonus issue of Ram Ratna Wires.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)