Last week, the BSE benchmark fell sharply, shedding 4,091.53 points or 4.98%, while the Nifty declined by 1,180.8 points or 4.76%.
Stock market participants are expected to focus on global trends and foreign investors’ trading activity in the upcoming holiday-shortened week, analysts said. With no major domestic triggers, the markets will look to global cues for direction.
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Equity Markets Closed for Christmas
Indian equity markets will remain closed on Wednesday, December 25, for Christmas, limiting market activity further during the week.
Key Global Indicators to Shape Market Sentiment
While no major domestic events are lined up, several global economic indicators, including US bond yields, dollar index performance, initial jobless claims, and new home sales data, are expected to influence market direction.
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“Amid heightened volatility and persistent FIIs (Foreign Institutional Investors) selling pressure, investors are likely to adopt a cautious stance,” said Pravesh Gour, Senior Technical Analyst, Swastika Investmart Ltd. “Despite recent weakness, the market outlook remains cautiously optimistic. However, relentless selling by FIIs has added to market pressure.”
Recent Market Performance Highlights
Last week, the BSE benchmark fell sharply, shedding 4,091.53 points or 4.98%, while the Nifty declined by 1,180.8 points or 4.76%.
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“The sudden change in FII strategy from buying to selling has impacted markets,” noted V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
Rupee, Crude Oil Prices to Be Monitored
Apart from global indicators, the rupee-dollar trend and the movement of global oil benchmark Brent crude will play a key role in determining the market’s trajectory.
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December Derivatives Expiry to Add Volatility
The scheduled expiry of December’s derivative contracts could further amplify market volatility this week. “The holiday-shortened week will see participants closely monitoring FII flow trends and global market performance for direction,” said Ajit Mishra, SVP, Research, Religare Broking Ltd.
Low Activity Expected Amid Festive Season
Siddhartha Khemka, Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd, added, “With the festive season approaching and global markets closed for 2-3 days, including a domestic holiday on December 25, market activity is expected to be low this week.”
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In this subdued and volatile environment, investors are advised to remain cautious and watch for global and FII-related developments.
