Market poised ahead of expiry

Our Analysis

The benchmark equity indices reversed losses to end the highly volatile session on a strong note ahead of December F&O expiry. Gains in global peers and development on the vaccine front enthused market participants, helping both Sensex and Nifty extend their winning run to 6th day in a row and end at record closing highs.. Were mirroring the global markets and indications are in favour of prevailing up move to continue and Nifty can test another milestone of 14,000 mark soon. On the domestic front, Auto sales numbers and PMI data would be actively tracked by participants ahead. Meanwhile, we suggest maintaining a positive yet cautious stance and avoiding contrarian trades.

In the global markets, European stocks edged higher as Britain approved a COVID-19 vaccine developed by AstraZeneca and Oxford University, while bets of more U.S. fiscal aid and massive vaccination efforts spurred hopes of a strong global economic recovery next year. In Asian trading, MSCIs gauge of Asia-Pacific shares excluding Japan rose to hit a record high, led by gains in Chinese shares. Japans Nikkei share average, however, lost on its last trading day of 2020.

In commodities, oil slipped towards $50 a barrel as tighter lockdowns in Europe and forecasts of a slower demand recovery outweighed relief from the roll-out of coronavirus vaccines.

This Weeks Market Highlights:

Benchmark Indices:

1) On Monday, Sensex rose 380 points to a record close of 47,353.75, thanks to buying in private lenders. It was the first time the 30-pack index ended above the 47,000 mark. Its NSE counterpart Nifty too settled at a record high of 13,873.20, up 123.95 points.

2) On Tuesday, Sensex ended at 47,613, up 259 points after hitting an all-time high of 47714.55 during the day. Its NSE counterpart Nifty settled above the 13,900 mark for the first time. The 50-pack index finished the day at 13,933, up 59 points.

3) On Wednesday, Sensex settled 133 points higher at 47,746 while the NSE Nifty closed at 13,982, up 45 points.

4) On Thursday,Sensex settled 5 points, or 0.01 per cent, higher at 47,751 levels. Nifty50, on the other hand, closed unchanged at 13,982 level.

Broader Index & Global Market:

- Investors dumped domestic equities on Monday as panic selling, owing to the global rout seen in the Asian and European stocks, fretted domestic investors. The fall was triggered amid fears of a resurgence of coronavirus following a new strain in the infection in the United Kingdom (UK). But again bulls took charge and the market is showing strong buying by FIIs. DIIs are still selling side.

- Global shares rose for the fifth straight day and oil followed suit as hopes of fresh U.S. stimulus teed up a strong end to the year for riskier assets. The MSCI World Index was up 0.3 per cent, extending recent gains after gains in Asia, where Japanese stocks hit a 30-year high. MSCIs broadest index of Asia-Pacific shares outside Japan rose 0.45 per cent. Early gains in Europe were broad-based, with all major indexes rising, led by Britains blue-chip shares. They rose on their first day of trading since the Christmas Eve agreement of a trade deal with the European Union. The FTSE 100 rose 1.5 per cent in early deals, on course for its fourth straight day of gains, led by drugmaker AstraZeneca on news its Covid-19 vaccine is set to be granted emergency use approval within a few days.

Movers & Shakers

Shares of Fineotex Chemical surged 20 per cent to hit a 52-week high of Rs 64.90 after Nippon India Mutual Fund (MF) bought nearly 6 per cent stake in specialty chemicals company via open market.

Shares of IDBI Bank skid 11 per cent on the BSE after listing 372 million equity shares allotted to qualified institutional buyers (QIBs). In the intra-day trade, it tanked 19%.

Key Market Drivers

• Coronavirus vaccine
• Lockdown in Europe
• Q2FY21
• UK Lockdown

Event Watch

International:

• Coronavirus vaccine
• South Korea inflation rate
• Japan industrial production
• China industrial profit

Domestic:

• Coronavirus- vaccine
• Q2FY21
• India infrastructure output

Stocks To Watch

Zydus Wellness Ltd On Upside while, UPL Ltd on Downside.