How do you see the Nifty and Sensex on Monday, 06 December after the weak close in the markets last Friday?

On Friday, 03 December, the Nifty index closed 204 points lower. During the previous week, despite the bouts of volatility, the index held above the 17,000 mark on a closing basis. However, the advance decline ratio was unfavourable at 12:38 for Friday, although the VIX remained subdued around 18 levels, which is the good news.

On Friday the trends in the market were rather disparate. Oil refining companies like IOCL and BPCL saw a spike on Friday but most of the heavyweight stocks in the index like Reliance, Asian Paints and Kotak Bank were under pressure. There is also the overhang of the monetary policy which is expected to be announced on 08 December.

Foreign investors net sold Rs.3,356 crore in equities while domestic funds bought Rs.1,649 crore of equities on Friday, continuing the trend of FII selling. In global market trends, Dow was marginally negative but NASDAQ cracked by nearly 192 bps on amidst selling pressure on Friday. Europe was in the red and SGX Nifty is trading with loss of 20 bps in early trades.

There are 2 major triggers this week. There is the monetary policy where the market is expecting a hawkish not from the RBI. It may not be a rate hike but could be a reverse repo hike or a shift in the accommodative monetary stance. The second trigger will be the listing of the Star Health IPO on Friday, considering that it was subscribed only 79%.