Market Ahead, December 7: Top factors that could guide markets this week

The Indian extended the bull run for the fifth straight week, with the benchmark index Sensex rising by more than 2 per cent last week to scale the 45,000 level for the first time. The broader Nifty50 also finished the week at a record closing level of 13,259.

Amid lack of fresh domestic cues, global developments are expected to dictate the market trend this week. Besides, related to coronavirus situation, Covid vaccine, US stimulus, and macro data will also be in focus.

Meanwhile, the Serum Institute of India on Sunday became the first indigenous company to apply to the DCGI, seeking emergency use authorisation for the Oxford Covid-19 vaccine in the country citing unmet medical needs due to the pandemic and in the interest of the public at large.

A day earlier, the Indian arm of US pharmaceutical giant Pfizer became the first to seek a similar approval from India’s drug regulator for its own Covid-19 vaccine in the country, after securing such clearance in the UK and Bahrain.

India reported 32,272 fresh Covid-19 cases on Sunday, taking the tally to 96.76 lakh. The Health ministry, on Saturday said that for the past eight days, the daily new recoveries recorded in the country have been more than the daily cases.

This apart, would also be waiting for industrial production and inflation data, to be announced post market hours on Friday. CPI in India increased to 7.61 per cent in October from 7.27 per cent in September.

Besides, sentiment in the market will also be guided by other major market movers like trend in the rupee, Brent crude and foreign capital flows. Foreign institutional investors were net buyers in the equity segment last week, with net inflow of Rs 16,520 crore.

Now, let’s see how the are positioned from a technical point of view.

According to Sameet Chavan of Angel Broking, the broader degree trend remains strongly bullish and in case of any meaningful decline, one should stick to the ‘buy on decline’ strategy. The ‘Rising Wedge’ pattern is being formed on hourly chart and hence, a move below 13,100 would lead to further profit booking towards 12,980 – 12,900. Hence, traders should note these key levels and act accordingly. 

And, finally, let’s look at the market setup for today.

SGX Nifty was flat at around 13,333 levels at 7:30 AM, indicating a flat start for the Indian markets. This comes amid mixed trends in Asian shares early Monday.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.2 per cent, on track for its fifth straight session of gains.

Japan’s Nikkei fell 0.3 per cent while Australian shares climbed half a per cent. Hong Kong’s main index, meanwhile, slipped over 1 per cent.

On Wall Street, stock indexes reached fresh all-time highs on Friday on hopes of a much-needed US stimulus package before year-end just as coronavirus vaccines roll out, while oil prices hovered near their highest since March. The Dow rose 0.8 per cent, the S&P 500 gained 0.9 per cent and the Nasdaq added 0.7 per cent.

In commodities, oil prices hovered near their highest since March on Friday. Brent was last down at $49.10 per barrel.

Besides, the National Stock Exchange has revised circuit limits of 302 stocks with effect from today. The circuit limit of Adani Gas, Angel Broking, Arvind Fashions, Central Bank of India, Emkay Global, SH Kelkar and Company and Snowman Logistics has been revised to 20 per cent from 10 per cent.

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