Indian markets likely to witness record level profit-booking before Christmas

The domestic markets are likely to witness profit-booking at record levels ahead of Christmas. However, in the absence of major domestic triggers, the equity market would turn its focus on global events mainly US financial stimulus update and development related to COVID-19 vaccination in the holiday-shortened week ahead and Brexit, analysts said.

Head of Research at Geojit Financial Services Vinod Nair said, this week, the market will be maintaining its focus on global events, as a decision on the US stimulus package and Brexit deal can be expected.

Adding to that, Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services, said, “Going ahead, the markets may continue with its positive bias on the back of abundant liquidity, effective vaccine rollout and increasing prospects of a US financial stimulus.

However, intermittent profit-booking cannot be ruled out as the Christmas vacation starts this week. Markets could also be volatile given monthly futures and options (F&O) expiry, he added.

The investment pattern of foreign portfolio investors (FPIs), a major driver of Indian equity markets, will also be tracked by investors.

On Saturday, Kotak Mahindra Asset Managemet MD Nilesh Shah tweeted, markets are seeing an unexpected rise as flows (Retail & FPIs), fundamentals (Sept Results, Advance tax nos) and sentiments (low returns in debt, hope on budget) have come together.

Sumeet Bagadia, Executive Director, Choice Broking said, “Investors will continue to monitor development related to COVID-19 vaccination, stimulus update and Brexit trade deal.”

“Currently, indices seem to be in the hands of all-charged bulls and the mighty bear seem to have given up. However, one cannot rule out mild profit-booking on the way up,” said Nirali Shah, Senior Research Analyst, Samco Securities.

Over the past week, the BSE benchmark gained 861.68 points or 1.86 per cent.

Financial markets will remain closed on Friday for Christmas.

(With input from agencies)

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