On Friday, the Nifty closed 152.70 points, or 0.59%, higher at 26,186.45.
Commenting on the trend, Ravi Singh, Chief Research Officer at Master Capital Services, said the sharp surge on Friday reaffirmed the strength of the prevailing uptrend. He added that the market structure remains bullish, supporting a buy-on-dips strategy for a constructive medium-term outlook.
“The daily RSI at 63 reflects healthy buying momentum, while the MACD staying in positive territory supports continued trend strength. On the technical front, resistance is placed near 26,350, and a decisive breakout above this zone could extend the move toward 26,600,” Singh said.
Factors likely to drive market movement when trading resumes this week:
1. Fed FOMC
Global markets will train their guns on the US Federal Reserve’s policy outcome this week as the rate-setting committee meets on December 9 to decide whether to deliver a 25 bps rate cut. Investors will also track the central bank’s commentary on the economy, labour market, and the likely rate trajectory going forward.
The two-day meeting will conclude on December 10, followed by a press briefing from Chair Jerome Powell.
2. US markets
Major indices on Wall Street ended higher on Friday, supported by favourable economic data and expectations of a rate cut.
Consumer spending rose 0.3% in September, in line with Street estimates, Reuters reported. The Personal Consumption Expenditures (PCE) Price Index also increased 0.3%, matching the previous month’s rise. On a year-on-year basis, the PCE Price Index advanced 2.8% in September after a 2.7% increase in August, with both readings aligning with forecasts.
Buoyed by these developments, the Nasdaq Composite closed at 23,578.10, up 72.99 points or 0.31%. The Dow Jones Industrial Average ended at 47,955, gaining 104.05 points or 0.22%, while the S&P 500 settled at 6,870.40, up 13.28 points or 0.19%.
Domestic and global markets are likely to take their cues from US market trends.
3. IPO watch
It will be an action-packed week for the primary market, with five mainboard IPOs and seven SME IPOs hitting D-Street. Together, these companies aim to raise Rs 13,807 crore.
The biggest newsmaker is the public issue of ICICI Prudential Asset Management Company, in which promoter entity Prudential Corporation Holdings Limited will sell up to 48,972,994 equity shares. The OFS size stands at a hefty Rs 10,603 crore. The IPO will open on Friday, December 12.
Read more: ICICI Prudential AMC sets Rs 2,061–2,165 price band for its Rs 10,603 crore IPO
The other mainboard IPOs opening this week are Corona Remedies, Wakefit Innovations, Park Medi World and Nephrocare Health Services. The SME issues include Riddhi Display Equipments, Prodocs Solutions, K. V. Toys India, Shipwaves Online, Unisem Agritech, Pajson Agro India and Ashwini Container Movers.
Five additional SME IPOs will close during the week, Western Overseas Study Abroad, Luxury Time, Flywings Simulator Training Centre, Encompass Design India and Methodhub Software.
On the listings front, Vidya Wires, Aequs and Meesho are set to debut in the mainboard category. Nine SME companies will also make their market debut this week.
Also Read: IPO Calendar: ICICI Pru AMC, Wakefit to anchor Rs 13,000 crore pipeline next week
4. FII/DII action
Foreign institutional investors’ (FIIs) activity remains a critical factor for domestic markets, influencing not just equities but also the rupee. FIIs turned net sellers on Friday, offloading Indian equities worth Rs 439 crore. Meanwhile, domestic institutional investors (DIIs) were net buyers, purchasing shares worth Rs 4,189 crore.
5. Technical Factors
Rupak De, Senior Technical Analyst at LKP Securities, said the sharp post-policy upmove in the Nifty has reinforced a positive trend, with the index comfortably holding above its 21-EMA. Decoding the charts, he noted that the index has broken out of its recent consolidation on the hourly chart, signalling rising optimism.
“The RSI has reclaimed a bullish crossover, pointing to strong momentum. In the short term, the trend may remain firm, with the Nifty likely to move toward 26,300–26,440. Support is placed at 26,060–26,000. Buying on dips may be favoured as long as the index sustains above 26,000,” De said.
6. Rupee Vs Dollar
The rupee on Friday gave up its initial gains and ended 6 paise lower at 89.95 against the US dollar, after the Reserve Bank cut the key benchmark interest rate for the first time in six months.
Forex traders said the RBI’s rate cut is likely to weigh on the rupee, but the central bank’s decision to purchase government bonds worth up to Rs 1 lakh crore through open market operations (OMO), along with a USD 5 billion buy-sell swap, will provide support to the local currency.
“Beyond the rate cut, RBI’s decision to purchase government bonds worth up to Rs 1 lakh crore through OMO, combined with a USD 5 billion buy-sell swap, marks a decisive effort to restore durable liquidity and stabilise currency markets after the rupee’s sharp depreciation,” said Sachin Bajaj, Executive Vice President & Chief Investment Officer, Axis Max Life Insurance.
7. Corporate Action
A clutch of stocks will be in focus this week on account of corporate actions. Tuesday, December 9, is the record date for the rights issue of Deccan Gold Mines.
Friday will be the record date for the 5:1 stock split of Mrs. Bectors Food Specialities. It will also be the record date for the 1:1 bonus issue and 5:1 stock split of Bharat Rasayan. Additionally, Nureca and VLS Finance have set Friday as the record date for their share buybacks.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
