Week ahead: Key market triggers for Sensex and Nifty

In the upcoming week, the Indian stock market is poised to be influenced by several crucial factors, including monthly derivatives expiry, IPO listings, foreign fund inflows, and global economic cues. D-Street experts predict that the Nifty 50 may test the 24,000 level amidst these developments.

Market Trends and Factors:

Monthly Derivatives Expiry: The expiry of December’s derivative contracts is expected to amplify market volatility.

IPO Listings: Several new IPOs and listings are slated for this week. Unimech Aerospace IPO will open on December 23, and other ongoing IPOs, including Transrail Lighting, DAM Capital Advisors, Mamata Machinery, Sanathan Textiles, and Concord Enviro, will close on December 23. Additionally, Ventive Hospitality, Senores Pharmaceuticals, and Carraro India IPOs will close on December 24. Multiple listings will occur on December 27.

Foreign Institutional Investors (FII) Activity: The market has faced persistent selling pressure from FIIs, influenced by high US bond yields and a strengthening dollar. FIIs sold over ₹15,828 crore in the secondary market last week, while domestic institutional investors (DIIs) bought ₹11,874 crore during the same period.

Global Economic Indicators: US bond yields, the dollar index, US initial jobless claims, new home sales data, and durable goods orders will be pivotal in shaping market direction. The global stock markets will be closed on December 25 for Christmas.

Crude Oil Prices: International crude oil prices saw little change in the previous session, with Brent crude futures closing at $72.94 a barrel and US West Texas Intermediate crude futures at $69.46 a barrel. In India, crude oil futures settled at ₹5,944 per barrel on the MCX.

Performance of Domestic Markets: The Sensex and Nifty 50 faced significant pressure last week, shedding 4.98% and 4.77%, respectively, due to weak global cues and foreign capital outflows. The Nifty 50 erased nearly 80% of the gains accumulated over the past four weeks. The Bank Nifty declined over 5%, closing below the critical 50,800 level.

Sectoral Performance:

Pharma: Resilient, ended higher.

Metals, Energy, Banking: Faced the hardest hits.

IT: Approaching a critical support zone.

Energy: Entered an oversold territory, which may trigger a short-term bounce.

Banking Index: Significant support lies at the long-term moving average of around 50,400 and the November low of 49,787.10.

Technical View: The Nifty has breached a critical long-term moving average support and is nearing the November low of 23,263.15. Breaching this level could intensify the downward trend, potentially pushing the index to 22,700. The 24,000–24,400 zone would act as a strong resistance in case of a rebound. The broader market sentiment remains bearish, with a "sell-on-rise" approach prevailing.

Key Support and Resistance Levels:

Nifty 50: Support at 23,600, resistance at 24,000–24,400.

Bank Nifty: Support at 50,200 and 49,800, resistance at 51,000–51,200.

Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies. Investors are advised to consult with certified experts, consider individual risk tolerance, and conduct thorough research before making investment decisions.