Markets end higher on monthly F&O expiry; metal, banks shine

After opening lower, Sensex and Nifty 50 picked up momentum in the trading session due to healthy buying in metal, banking, and oil & gas stocks. The overall performance in the broader market witnessed a cautious uptrend, however, these three sectoral indices led India benchmarks to end on a higher note.

Sensex closed at 61,133.88 higher by 223.60 points or 0.37%. Nifty 50 closed at 18,191 up by 68.50 points or 0.38%. In the trading session, Sensex touched a day’s high of 61,210.65 and Nifty 50 an high of 18,229.70.

Bank Nifty closed higher by 425 points, while BSE Bankex jumped nearly 451 points. Metal and Oil & Gas indices on BSE climbed by over 1% each. Alongside metal, the private bank index on NSE surged over 1%.

Stock like Bharti Airtel, SBI, Tata Steel, IndusInd Bank, and Axis Bank were top gainers. On the other hand, stocks like Tata Motors, Titan, Ultratech Cement, HUL, and Bajaj Finserv are top laggards.

Vinod Nair, Head of Research at Geojit Financial said, “the domestic market trend was influenced by the movements of its global counterparts, as a negative US closing pushed Indian bourses to a poor start. However, positive signals from US futures lifted the benchmark index above the flatline.”

Meanwhile, Ajit Mishra, VP – of Technical Research, at Religare Broking explained that markets traded volatile on the monthly expiry day and ended marginally higher amid mixed signals. After the gap-down start, the first half was dull as the Nifty index hovered in a narrow band however a sharp surge in the index majors in the latter half completely changed the tone. Consequently, it settled around the day’s high to close at 18,191 levels. Meanwhile, the sectoral indices witnessed a mixed trend wherein the metal and banking pack posted decent gains. The broader indices underperformed the benchmark and ended marginally in the green.

Also, Deepak Jasani, Head of Retail Research, HDFC Securities revealed that “last hour trades for F&O monthly expiry squaring off/rollover and Nifty index weight rejig trades helped Nifty end 0.38% or 68.50 points higher at 18191. Volumes in the NSE cash market were the lowest in 6 months for F&O expiry day. Broad market indices rose less than the Nifty as the focus was on large-caps and advance-decline ratio ended at 1.18:1.”

On global cues, Jasani said, “global equities were largely down in thin holiday trade on Thursday as risks related to a new surge in Covid-19 cases returned to investors’ radars. Investors also remain wary of the prospect of persistently high inflation, monetary policy tightening from central banks, and a potentially prolonged period of sluggish economic growth.”

Furthermore, at the interbank forex market, the rupee settled at 82.7975 against the US dollar after trading at its narrowest range in the current week. On the previous day, the local unit had closed at 82.8575 per dollar.

Going ahead, Nair said, markets will continue to witness such sudden movements, underpinned by lingering recession and COVID fears, which will be countered by bargain hunters.

While Mishra added that markets may attempt to extend the rebound on the last trading day of the calendar year however mixed global cues could cap the upside. Besides, the existence of a hurdle of around 18,350 in Nifty is added negative. He also said, “We thus reiterate our view to continue with stock-specific trading approach and maintain positions on both sides until we get clarity over the directional move in the index.”

On Nifty 50, Rupak De, Senior Technical Analyst at LKP Securities said, “the index could reclaim the 50 EMA on the daily timeframe, suggesting a rise in optimism among investors. The momentum indicator RSI (14) is in the bullish crossover. Over the near term, the index is likely to remain positive as long as it remains above 17,950. Therefore, buying on dips would be a good strategy until 17,950 is held. On the higher end, resistance is placed at 18,350.”

According to Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas, if Nifty 50 crosses the level of 18200 & sustains in the higher territory then it can march towards 18400 in the short term. On the other hand, the level of 18000 will continue to provide a cushion on the downside.

As for Bank Nifty, Kunal Shah, Senior Technical Analyst at LKP Securities said, the index remains in a buy mode and any dip should be an ideal opportunity to initiate long positions with immediate support at the 42,700-42,400 zone. The momentum indicators are in the strong buying zone and the index is likely to head higher toward 44,000-45,000 zone levels.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.