Market Watch: Sensex reshuffle, GST Council decisions, IPO activity, and more

Indian equities wrapped up their worst week of 2024, with the Sensex and Nifty50 tumbling nearly 5% amid a global sell-off sparked by hawkish comments from the US Federal Reserve.

The Sensex dropped by 1,176.46 points, or 1.49%, closing at 78,041.59, while the Nifty50 lost 364.20 points, or 1.52%, settling at 23,587.50. Investor wealth declined by ₹18.5 lakh crore over the week.

As markets reopen on Monday, both domestic and global factors will influence market sentiment.

GST Council Decisions

Insurance stocks are likely to remain in focus after the GST Council deferred its decision to reduce GST rates on life and health insurance premiums by 18%. Meanwhile, the council raised the tax rate on all used cars, including electric vehicles, from 12% to 18%, although sales between individuals remain exempt. Auto stocks may react to this decision.

Fortified rice kernel stocks may see movement as the GST rate was reduced from 18% to 5%, while liquor and tobacco stocks, such as ITC, could remain volatile due to the postponement of decisions regarding a 'sin tax.'

Holidays Impacting Global Markets

Global market closures for Christmas will shorten the trading week. Major markets, including the US, UK, and Australia, will close early on Tuesday, December 24, and remain shut on Wednesday, December 25. Markets in Australia, Germany, and France will also close on Thursday for Boxing Day.

Sensex Reshuffle

Zomato will make headlines on Monday as it becomes the first new-age tech company to join the 30-member BSE Sensex, replacing JSW Steel in the index reshuffle, effective December 23. This change is expected to drive $513 million into Zomato, while JSW Steel may see outflows of $252 million. Stocks like Mahindra & Mahindra, ITC, Infosys, and Sun Pharmaceuticals could experience weight changes within the index.

FII/DII Activity

On Friday, Foreign Institutional Investors (FIIs) were net sellers at ₹3,597.82 crore, while Domestic Institutional Investors (DIIs) were net buyers at ₹1,374.37 crore. However, FIIs recorded net inflows of ₹21,789 crore in December, reversing the trend of heavy outflows in recent months.

Primary Market Buzz

Unimech Aerospace’s IPO, priced between ₹745–785 per share, will launch on Monday. Additionally, SME IPOs such as Solar91 Cleantech and Anya Polytech are set to open later in the week. Eight recently subscribed IPOs, including Ventive Hospitality and Carraro India, are expected to list next week.

Forex and Oil Trends

The rupee gained 9 paise on Friday, closing at ₹85.04 against the US dollar. However, it remains under pressure due to strong dollar demand and a robust US economy. The Dollar Index (DXY) is expected to stay strong, with resistance at 110.

Oil prices continue to influence market sentiment, as rising crude prices stoke concerns about inflation. Brent crude ended at $72.94, up 0.14%, while WTI stood at $69.58, up 0.29%.

Corporate Actions

Stocks like Vedanta, NMDC, and Mazagon Dock Shipbuilders could see action ahead of their record dates for corporate actions, including dividends, bonuses, and stock splits.