Cases of omicron variant are rising sharply and many countries have started to take some kind of restriction measures that are also hurting the market sentiments. FIIs’ behavior will play a critical role in the direction of market.

Indian equity markets are likely to witness further weakness in the short term. Benchmark indices enter Monday’s trading session after having plunged deep into the red during the previous week’s trade. After falling over 3.5% in the last five trading sessions, S&P BSE Sensex is at 57,011 while Nifty 50 is at 16,985. Global markets are turning volatile and showing weakness that may also cause volatility in the Indian equity market. Cases of omicron variant are rising sharply and many countries have started to take some kind of restriction measures that are also hurting the market sentiments. FIIs’ behavior will play a critical role in the direction of our market. Technically, Nifty is witnessing selling pressure from the 17600 level after a pullback where 16900 is an immediate and important support level on a closing basis where if Nifty slips below 16900 level then it may head towards the next critical demand zone of 16700-16400. On the upside, 17250-12375 will act as a critical supply zone at any pullback; above this, we can expect any short-covering rally, said Santosh Meena, Head of Research, Swastika Investmart Ltd.

Global cues

Asian share markets fell on Monday as surging Omicron cases triggered tighter restrictions in Europe and threatened to drag on the global economy into the coming year. Futures on the Dow Jones Industrial Average dropped 230 points. S&P 500 futures dipped 0.88% and Nasdaq 100 futures declined 1.02%. This comes after the S&P 500 fell 1.9%. The tech-heavy Nasdaq Composite dropped nearly 3% last week as investors dumped high-flying growth stocks on the prospect of higher interest rates, while the Dow slipped 1.7%. MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.4% and Japan’s Nikkei fell 0.7%. Early Monday, yields on U.S. 10-year notes were down at 1.38% and well below their 2021 top of 1.776%. Gold was looking firmer at $1,801 an ounce, having broken a five-week losing streak last week as equities slipped. Oil prices swung lower with Brent falling $1.56 to $71.96 a barrel, while U.S. crude lost $1.43 to $69.43 per barrel.

Key support and resistance levels on the Nifty

Nifty on the weekly chart has formed a long bear candle post upside bounce of the previous two weeks. The weekly chart pattern indicates a formation of falling three methods (not a classical one) and this could be considered as a bearish continuation pattern. An attempt of bulls to make a comeback from the lows went into toss and the market followed the downtrend continuation pattern as per the long term charts. One may expect further weakness down to 16,750 and lower by next week. Immediate resistance is placed at 17,180 levels, said Nagaraj Shetti, Technical Research  Analyst, HDFC Securities.

Technical view

After showing consolidation movement with weak bias in the three sessions prior November 17, Nifty tumbled down sharply on Friday and closed the day by 263 points. After opening with a slightly negative note, the market continued with decisive intraday weakness in the early-mid part of the session. The attempt of upside recovery of mid part failed to sustain and the market finally closed near the lows. A long bear candle was formed on the daily chart, that has broken below the immediate support of ascending trend line, which was connected rising swing lows. This market action indicate sharp downward reversal in the market post upside bounce of early part of the month. Hence, one may expect further weakness in the short term, said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.

Banknifty is underperforming and witnessed closing below its 200-DMA. If it trades below its 200-DMA then we can expect further weakness towards 34800/34000 levels. On the upside, 36000 will act as an immediate hurdle while 36500 will be the next critical hurdle, said Santosh Meena.

Stocks under F&O ban on NSE

Escorts, Indiabulls Housing Finance, and Vodafone Idea are the three stocks under the F&O ban for Monday (December 20). Securities in the ban period under the F&O segment include companies in which the security has crossed 95 percent of the market-wide position limit.

IPO Watch

MedPlus IPO share allotment: Finalisation of Medplus Health share allocation is likely to happen today as tentative Medplus IPO allotment date is 20th December 2021. Those who have applied for the public issue worth Rs 1,398.30 crore can check Medplus IPO allotment status online at BSE website or at the website of official registrar of the public offer. The official registrar of the public offer is KFintech Private Limited.

Shriram Properties Listing: Shares of Shriram Properties will be listed on the exchanges today. The Rs 600-crore IPO was subscribed 4.8 times. The Qualified Institutional Buyers (QIBs) portion was subscribed 1.04 times, while the Non-Institutional Investors (NII) and Retail Individual Investors (RIIs) portions were subscribed 0.80 times and 7.46 times, respectively. The issue price for the shares was Rs 118 per share. 

Supriya Lifescience IPO: The initial public offering (IPO) of Supriya Lifescience Limited, a manufacturer and supplier of Active Pharmaceutical Ingredients (API), will close today. The IPO was subscribed 5.69 times on Friday, the second day of bidding. The Qualified Institutional Buyers (QIBs) portion was subscribed 0.53 times while the Non-Institutional Investors (NIIs) and Retail Individual Investors (RIIs) portions were subscribed 2.90 times and 25.38 times, respectively. The offer price has been fixed at Rs 265-274 per equity share.

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