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Market Update

Nifty : 25,839.65 -120.90 (-0.47%)

Sensex : 84,666.28 -436.41 (-0.51%)

* Equity benchmark indices extended their decline for the second straight session, with the Sensex falling over 400 points and the Nifty slipping below the 25,900 mark as traders remained cautious ahead of the US Federal Reserve’s policy announcement later this week. Persistent foreign fund outflows, delays in the US-India trade agreement, and weak global cues further weighed on sentiment.

* Despite the broader market weakness, beaten-down mid-cap and small-cap stocks saw bargain buying after dropping more than 3% in the previous session. The Nifty Smallcap and Midcap indices gained 1% and 0.5%, * respectively. The Sensex closed 436 points, or 0.5%, lower at 84,666, while the Nifty ended 120 points, or 0.5%, down at 25,839. Over the past two sessions, the Sensex has tumbled more than 1,200 points (1.5%) and the Nifty nearly 350 points (1.4%). The advance-decline ratio for Nifty 500 stocks stood at 2.5:1, reflecting stronger momentum in mid- and small-cap counters.

* Auto, metal, select financial, and FMCG shares staged a recovery from intraday lows, whereas the Nifty IT index dropped over 1% ahead of the Fed’s December 10 interest-rate decision. Coforge, HCL Tech, Wipro, and Tech Mahindra declined between 1.5% and 4%. Across global markets, both Asian and European indices were in the red as investors grew increasingly cautious about the Fed’s policy outlook.

Technical Outlook:

* Nifty index opened negative and continued the selling stance and broke its immediate support levels of 25750 zones. It attempted some recovery post the initial sell off but again gave up towards the end of the session and closed with losses of around 120 points.

* It formed a small bodied bearish candle on the daily frame and has been making lower highs – lower lows from the last two sessions. Now till it holds below 25900 marks, index may face some weakness towards 25750 then 25600 zones while hurdles have shifted lower to 26000 then 26150 zones.

Derivative Outlook:

* Nifty future closed negative with losses of 0.41% at 25958 levels. Positive setup seen in LTF, Titan, MCX, Shriram Finance, Laurus Labs, AU Bank, IIFL, PB Fintech and Canara Bank while weakness in Asian Paints, TMPV, IEX, INOX Wind, JSW Energy, Max Healthcare, BPCL, Cipla, OIL, Jiofin and Piramal Pharma.

* On option front, Maximum Call OI is at 26000 then 26300 strike while Maximum Put OI is at 25500 then 25400 strike. Call writing is seen at 26000 then 25900 strike while Put writing is seen at 25400 then 25800 strike. Option data suggests a broader trading range in between 25400 to 26300 zones while an immediate range between 25600 to 26100 levels. Solid Research

Global Market Update

* Asian stocks slipped, as investor sentiment turned jittery ahead of the Federal Reserve’s upcoming rate decision, with caution rising around the future policy direction of the US central bank.

* European stocks advanced, with the defense sector rallying as Germany prepares to authorize a record amount of orders for military gear and services. Renewables also outperformed.

* US Data - Jolt Job opening and Small Business Optimism.

* Commodity - Brent Crude declined 0.5% to below $63/bbl as traders focus on talks to end the war in Ukraine, a looming global supply surplus and U.S.

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