By Harshita Tyagi
Despite witnessing increased volatility after two days of strong momentum, benchmark indices managed to close the day on Thursday in gains for the 3rd consecutive session. While Nifty and Sensex closed with gains of around 0.3%, the broader market outperformed with the midcap index up 0.6% and smallcap index gaining 1.2%.
Benchmark indices Sensex and Nifty are likely to open in red on Friday as trends on SGX Nifty indicated a cautious opening for the broader index in India with a loss of 17 points. The Nifty futures were trading around 17,528 levels.
Market has seen good recovery in the last three days as buying emerged at lower levels with the comfort of lower valuation and receding fears of Omicron virus. We expect the market to consolidate at current levels for the next few days after moving up sharply. The overall structure to remain positive, hence suggest trades to maintain buy on dips strategy, said Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services Ltd.
Key things to watch out for before the opening bell
Asia-Pacific markets declined on Friday as investors assess risks associated with the new omicron Covid variant and look ahead to key inflation data in the U.S. Japan’s Nikkei 225 extended losses from the previous session and was down 0.16% in early trade. The Topix index traded fractionally higher.
Asian markets mirrored US markets as Wall Street closed lower on Thursday as investors banked some profits after three straight days of gains. The Dow Jones Industrial Average fell 0.06 points to 35,754.69, the S&P 500 lost 33.76 points, or 0.72%, to 4,667.45 and the Nasdaq Composite dropped 269.62 points, or 1.71%, to 15,517.37.
Nifty formed a dragonfly Doji as it turned out to be session of rangebound trade. Although Nifty closed a share below 50 day EMA, it was Nifty 500 Index which is comfortably above this average. Some fresh longs were seen in Futures while BN saw profit booking. FII’s sold in cash worth Rs 1,585 crore while DII’s continued to buy and added equities worth Rs 783 crore, said Rahul Sharma, Director-Head Research, JM Financial Services Limited.
Options concentration is seen at 17,500 straddle indicating possible big move on either side. BN added the most OI at 37,000 straddle. However, concentration stands at 37K Put and 38K Put. Some cooling off may happen but the weekly setup of Nifty is quite robust and dips can be used as buying opportunities. Nifty supports at 17,445 and 17.251 while resistance is placed at 17,545 and 17,650, he added.
Nifty support, resistance levels to watch out for
Nifty ended higher for the third consecutive session on 9 December helped by positive global cues. Nifty opened higher but soon ran into a correction. After making an intraday low at 1030 Hrs, it started making higher lows. At close, Nifty was up 0.27% or 47 points at 17,517.
Nifty saw lower upward momentum on day three, as expected. However, the advance-decline ratio continues to remain high comforting the sentiments. Nifty could face resistance from 17564-17600 band while 17351-17379 band could provide support, said Deepak Jasani, Head of Retail Research, HDFC Securities.
Stocks under F&O ban on NSE
Escorts and Indiabulls Housing Finance are the two stocks under the F&O ban for December 10. Securities in the ban period under the F&O segment include companies in which the security has crossed 95 percent of the market-wide position limit. All clients/members are to trade in the derivative contracts of both securities only to decrease their positions through offsetting positions. Any increase in open positions to attract appropriate penal and disciplinary action.
Star Health and Allied Insurance, the country’s largest private health insurer will make its market debut on Friday. It is likely to witness a weak listing. The company’s shares on Thursday traded at a discount of Rs 60- Rs 70 to its IPO price of Rs 900 in the grey market.
Metro Brands Limited (MBL), backed by Rakesh Jhunjhunwala, is floating its maiden public issue on December 10. The IPO will close for subscription on December 14. The price band fixed for the IPO is Rs 485–500 per share of a face value of Rs 5 each.