Indian benchmark indices are likely to open on a positive note, hinted SGX Nifty as Nifty futures traded marginally higher at 17886 on the Singapore Exchange. “This week will mark the end of the calendar year and participants will be eyeing core sector data and current account deficit on 30 December. Before that, the scheduled derivatives expiry of December month contracts would keep the participants busy. Besides, the performance of the global indices amid the rising fear of COVID cases will further add to the volatility. All sectors, barring healthcare, look vulnerable to further slide but the major challenge would be to handle the pressure in the broader markets. Participants should align positions accordingly while keeping a check on leveraged positions,” said Ajit Mishra, VP – Technical Research, Religare Broking Ltd.
Key things to know before market opening bell
Global market watch: Asian markets trade flat today, while Wall Street shuffled to a modestly higher close on Friday as investors digested a deluge of economic data ahead of the Christmas holiday. The Dow Jones Industrial Average rose 0.53%, the S&P 500 gained 0.59%, and the Nasdaq Composite added 0.21%. Muted trading was seen in the Asian Markets with Japan’s Nikkei up 0.4%, South Korea’s Kospi and Mainland China’s Shanghai Composite index trading flat, and Hong Kong’s Hang Seng index down 0.44%.
Nifty technical view: “On the daily charts, we can observe that the Nifty has breached and closed below the psychological level of 18000. Moreover, it has breached the rising support trendline which indicates that the Nifty is firmly in the grip of the Bears. On the weekly charts, it has reached the 20-week moving average (17839) which can provide some relief during the week, however, it is likely to be short-lived and overall short-term trend has turned negative,” said Jatin Gedia, Technical Research Analyst, Sharekhan by BNP Paribas.
Levels to watch: “Volume profile indicates that Nifty may find further support around 17500-17550 zone. Coming to the OI Data, on the call side, the highest OI is observed at 18000, followed by 18100 strike price. While on the put side, the highest OI was at 17500 strike price. On the other hand, Bank Nifty
FII and DII data: Foreign institutional investors (FII) net sold shares worth Rs 706.84 crore, while domestic institutional investors (DII) net purchased shares worth Rs 3,398.98 crore on Friday, 23 December, according to the provisional data available on the NSE website.
Stocks under F&O ban on NSE: The National Stock Exchange has Indiabulls Housing Finance under its F&O ban list for 26 December. Securities thus banned under the F&O segment include companies where derivative contracts have crossed 95% of the market-wide position limit.
IPO Watch: Radiant Cash Management IPO will enter into second day of bidding on Monday, and the closing date would be 27 December. The retail cash management services provider aims to mop up Rs 388 crore from the maiden issue, at the upper end of a price band of Rs 94-99 per share. Sah Polymers will be the last public issue for the current calendar year, opening for subscription from 30 December to 4 January. It will announce its IPO price band today. The 1.02 crore shares IPO is entirely a fresh issue.
FPI flow: FPI flows in December up to 24 indicate net investment of Rs 7,278 crores (NSDL data). But if we exclude the buy figure of Rs 8,977 crores on 1 December (mostly bulk investment ), the net FPI investment in December stands at negative Rs 1,699 crores. “FPIs have turned cautious in recent days. Concerns about Covid spread in China is a negative sentiment and the strong economic data from the US indicate continuation of the hawkish stance of the Fed which is pushing bond yields up and equities down. Only reversal of this trend will trigger a rebound in the market. In the first half of December, FPIs were buyers in autos, capital goods, FMCG and real estate stocks. They were sellers in consumer durables, oil and gas, power and financials. FPIs are likely to turn cautious in the near term. Macro data from the US and Covid news will drive FPI flows and the markets in the near term,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services
Covid fears: A new Covid variant, in several parts of the world including China, US, Japan, South Korea, and France, has been making market participants cautious since last week. Reportedly, the surge in Covid cases in China, the world’s most populated country, is due to new variant of Omicron – BF.7. Though the highly-transmissible this variant is not a concern for India, according to several experts. In India, hospitalisations have not risen despite the detection of four BF.7 cases in the last few months, indicating that Indians are better protected because of their natural immunity from infection along with vaccine coverage, they said.
F&O Cues: As we will enter into monthly F&O expiry week, markets may witness volatility. “For the coming monthly settlement, once again the Call options open interest in the Nifty is significantly higher compared to Put bases. However, the Nifty is trading below its Put base of 18,000. Despite the Nifty closing well below 18,000, there was no closures in 18,000 strike Puts, which keeps hopes intact of some bounce,” ICICI Direct said.
Crude Oil price: Oil prices settled about $3 per barrel higher on Friday for a second straight week of gains after Moscow said it could cut crude output in response to the G7 price cap on Russian exports. Brent crude settled at $83.92, up by $2.94 or 3.6%, while US West Texas Intermediate (WTI) crude settled at $79.56 a barrel, up $2.07, or 2.7%. Both benchmarks recorded their biggest weekly gains since October.