Indian stock markets are anticipated to open cautiously on December 26, 2023, as both the Nifty 50 and Sensex index are expected to trade within a narrow range. This comes despite supportive cues from global markets, reflecting a sentiment characterized by low trading volumes due to the holiday season. Investors are focusing on technical levels and specific stock opportunities, as indicated by trends from GIFT Nifty, which suggests a muted start for domestic trading.
The Nifty futures are currently trading near the 26,143 level, down 33 points from the previous close. On December 25, markets were closed in observance of Christmas. In the last trading session on December 24, both benchmark indices ended marginally lower, as profit-taking activities weighed on investor sentiment. The Sensex fell by 116 points (0.14%) to close at 85,408.70, while the Nifty 50 decreased by 35 points (0.13%) to finish at 26,142.10.
Market Trends and Sector Performance
The performance of various sectors has been mixed. The Nifty Midcap100 index declined by 0.6%, whereas the Nifty Smallcap100 index recorded a modest gain of 0.3%. Among sector indices, metals, realty, and automotive sectors showed slight improvements, while Oil and Gas, IT, and Pharma sectors experienced losses ranging from 0.4% to 0.7%.
Looking ahead, the Sensex is expected to continue trading within a narrow range. Immediate resistance is observed near 85,750, with critical support at 85,300. Should the index sustain levels above 85,750, it could pave the way for a potential rally towards the 86,000-86,200 mark. Conversely, a drop below 85,300 may lead to further declines, potentially testing levels around 85,000.
The Nifty 50 maintains a positive outlook despite ongoing consolidation. The 20-day moving average, which aligns with the 26,050-26,000 range, serves as a significant support area. A breakout above the 26,300-26,350 range could signal the next phase of an upward trend, possibly reaching new highs. Resistance is strong at the 26,200 level due to substantial call writing, while heavy put open interest at the 26,000 strike reinforces this as a robust support level. The India VIX has decreased by approximately 2% to 9.19, suggesting a calmer market sentiment.
Bank Nifty Outlook
For the Bank Nifty, consolidation is expected to continue, forming a base within the 58,500-60,100 range in the coming weeks. A strength above last week’s high of 59,533 could open up upside potential towards the recent all-time high of 60,100. Key support is noted at 58,300-58,600, where it coincides with the 50-day EMA and a recent breakout area. Resistance is identified around 59,550, and a breakout from this range is anticipated to determine the next direction for the banking index.
Investors remain vigilant as they navigate this cautious trading environment, focusing on both technical signals and sector performance to inform their strategies moving forward.
