How do you see the stock markets on 30th December? Do you see the F&O expiry impacting the markets on Thursday?

On Wednesday Nifty closed 20 points lower reflective of the sense of uncertainty ahead of the F&O expiry on 30th December. A large part of the market story on 30-Dec will be to see if the long rollovers would really pick-up steam on the last day into fresh long positions in the new series. However, with low VIX I don’t see fresh shorts building.

In terms of the market structure on Wednesday, the advance decline ratio was negative on Wednesday at 19:31 for the Nifty while the India VIX gradually tapered to 16.24 levels. The big gainers on Monday were the pharma and Auto stocks like Sun Pharma, Bajaj, Eicher and Divi’s Laboratories. Clearly, defensives and EVs could be big themes.

Foreign investors were net sellers in equities of Rs.975 crore while domestic funds bought stocks worth Rs.1,007 crore on Wednesday. Global markets were muted. Dow was 91 points higher while NASDAQ was flat. European markets continued mixed on Wednesday. SGX Nifty is trading with about marginal 15 bps gains in early trades but it will be about expiry.

Normally, the end of the year and the start of the new year is when a lot of FPI allocations get done. FPIs have been cautious on Indian markets since the beginning of October. However, if December quarter also surprises on the upside, the markets could see fresh flows from FPIs. But that would still be some time away.