Indian markets concluded the week on a lower note, breaking a seven-week winning streak with a decrease of approximately half a percent. Profit booking at higher levels contributed to this downturn. As the new week unfolds, investors will closely monitor key events, including the F&O December series expiry, India’s fiscal deficit, current account deficit, deposit growth, bank loan growth, and the goods trade balance. Additionally, attention will be on the release of economic data, such as India’s infrastructure output and eight core sector data scheduled for December 29.
In the global context, the upcoming week will be shortened due to the closure of US markets on December 25 for Christmas. Investors will focus on economic indicators such as the Chicago Fed National Activity Index, Redbook on December 26, Richmond Fed Services and Dallas Fed Services on December 27, Goods Trade Balance, Initial Jobless Claims, and Continuing Jobless Claims on December 28, and Chicago PMI and Baker Hughes Oil Rig Count on December 29.
Providing insights into the market outlook, Deepak Jasani, Head of Retail Research at HDFC Securities, highlighted that Nifty closed higher for the second consecutive session on December 22, rising by 0.44 percent or 94.34 points to 21349.4. Despite this positive momentum, Nifty concluded the week lower after a seven-week rally. Jasani noted the possibility of resistance around the 21492-21553 range and support near 21150, suggesting a potential “sell on rise” pattern in the coming days.
Examining Bank Nifty, Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities, observed selling pressure on the index’s last day but emphasized its ability to maintain support at 47400. Shah projected potential further declines if the index fails to sustain above this support, with resistance at 47,700 and a breakout potentially triggering short-covering.
Discussing foreign investment trends, Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, highlighted a significant shift in Foreign Portfolio Investment (FPI) inflows, turning positive in December after three months of negativity. The decline in US bond yields contributed to this shift, with FPIs showing interest in financial services, autos, capital goods, and telecom sectors. Vijayakumar anticipated increased FPI purchases in 2024 amid expectations of further declines in US interest rates.