The Nifty ended its four-day losing run on Friday but still finished the week 0.3% lower. On Friday, the index gained 150.85 points, or 0.58%, to close at 25,966.40.
Trading volumes are expected to remain low globally due to the extended Christmas holidays. While most global markets will remain shut for several days, Indian markets will close only on Thursday, December 25. When trading resumes next week, several domestic and global factors could guide market direction.
Osho Krishan, Chief Manager – Technical and Derivative Research at Angel One, advised investors to stay cautious. He said the Nifty is struggling to make strong moves, as seen from the inside-bar pattern on the weekly chart. Although the index has crossed the 20-DEMA, hurdles near the 20- and 50-DEMA levels remain.
Global market cues
Global market activity is expected to stay muted due to holidays. US markets will close early on December 24 and reopen on December 26. Germany will remain shut on December 24 and 25, while the UK, France and Australia will have early closures on December 24.
Several markets, including the UK, Germany, France, Australia and Canada, will also remain closed on December 26 for Boxing Day. Hong Kong will observe an extended Christmas break.
Indian markets are likely to take cues from the US, where Wall Street closed higher on Friday. The Nasdaq Composite rose 1.31%, the Dow Jones gained 0.22%, and the S&P 500 advanced 0.88%.
BSE index reshuffle
InterGlobe Aviation will enter the Sensex on Monday, while Tata Motors Passenger Vehicles will be excluded following its demerger.
The BSE 500 index will also see changes, with 32 stocks being added and an equal number removed. These changes, effective December 22, are part of the semi-annual review based on market capitalisation, free float and liquidity. Other indices affected include the BSE 100, Sensex 50 and Bankex.
FII and DII activity
Foreign Institutional Investor activity may remain limited due to holidays, shifting focus to Domestic Institutional Investors.
FIIs have turned net buyers for the past three sessions and bought shares worth Rs 1,830.89 crore on Friday. DIIs continued their strong buying, purchasing equities worth Rs 5,722.89 crore.
IPO watch
The primary market will remain active with 11 IPOs opening this week, aiming to raise around Rs 750 crore.
Gujarat Kidney & Super Speciality is the only mainboard IPO and will open for subscription on Monday, with a price band of Rs 108–114.
Several SME IPOs will also open, including Apollo Techno Industries, Bai Kakaji Polymers, Admach Systems, Nanta Tech, Dhara Rail Projects, Sundrex Oil, Shyam Dhani Industries, Dachepalli Publishers and EPW India. Issue sizes range from about Rs 31 crore to over Rs 105 crore.
There will also be five IPO listings during the week, with KSH International being the only mainboard listing.
Anchor lock-in expiry
Lock-in periods for anchor investors will end for 11 stocks this week. Ten stocks will complete their three-month lock-in, including VMS TMT, Ivalue Infosolutions, Saatvik Green Energy, GK Energy, Ganesh Consumer Products and others.
Arisinfra Solutions will see the end of its six-month lock-in on Friday.
Technical factors
Centrum Broking’s Nilesh Jain said a Doji candle on the weekly Nifty chart points to uncertainty. The index found support near its 50-DMA and closed above 25,900.
He sees resistance near 26,000, close to the 21-DMA. A sustained move above this level could trigger short covering and push the index towards 26,200. On the downside, support lies near 25,700.
India VIX remains near multi-month lows around 9.60, which may support positive sentiment.
Rupee versus dollar
The rupee strengthened sharply against the US dollar on Friday, gaining 97 paise to close at 89.27. Earlier in the week, it had slipped below 91 per dollar for the first time.
Currency experts believe RBI intervention late on Friday helped the rupee recover strongly in a thin market. The one-year forward premium rose to 2.84%, the highest since October 2022, due to strong hedging demand.
The rupee’s movement is expected to remain an important factor for markets in the absence of major global triggers.
Corporate actions to watch
Several stocks will be in focus due to dividends, stock splits, bonus issues and rights issues.
On Monday, December 22, Canara Robeco AMC will have its record date for an interim dividend. Knowledge Marine & Engineering Works will have a 1:2 stock split record date, while Pulsar International’s rights issue record date also falls on the same day.
Tuesday will see record dates for rights issues of Vineet Laboratories and Yug Decor.
On Wednesday, GRM Overseas will have a 2:1 bonus issue record date, Nectar Lifesciences will fix a record date for buyback, and Prakash Pipes will announce a Re 1 dividend.
On Friday, Nuvama Wealth Management’s 1:2 stock split and Ram Ratna Wires’ 1:1 bonus issue will have their record dates.
