Trade Setup: Market Braces For Last Trading Day Of 2023; Major Indices Surge 20%, F&O Cues Set Tone For 2024

As the final trading day of 2023 is here, the Nifty index celebrates a stellar year, marking a remarkable 20% surge. HDFC Bank emerges as the star performer, propelling the Nifty to its best annual performance since 2017. The derivatives market sets the stage for 2024, offering insights into the market sentiment.

The Nifty 50 closed the December series on a robust note, gaining 1,650 points. This surge cements 2023 as the best F&O series for the index this year. Except for UPL and Adani Enterprises, 48 out of 50 Nifty constituents have delivered positive returns in 2023, showcasing the broad-based strength of the market.

HDFC Bank takes the spotlight as the primary contributor to the index rally in December, contributing nearly one-fifth of the overall gains. The banking giant's stellar performance positions it as a potential investment opportunity, attracting keen interest from investors.

The Nifty Bank steals the show in the December series, with almost 75% of its 2023 gains realized in the month. Despite being an underperformer earlier in the year, the Nifty Bank is now up almost 13%, tantalizingly close to breaching the 50,000 mark. All 12 constituents of the Nifty Bank delivered positive returns, with PNB leading the pack with a remarkable 70% increase.

The Nifty 50's F&O cues provide valuable insights into market sentiment. The index closed the December series with a 1.4% drop in Open Interest and rollovers of 79.5%. The Nifty Bank's futures, on the other hand, added 2.5% on expiry, finishing with rollovers of 81%. The Nifty 50's Put-Call Ratio stands at 1.3, signalling a shift in market dynamics from earlier levels.

In the F&O ban list, Hindustan Copper makes a re-entry, while NALCO and RBL Bank exit, reflecting changes in regulatory considerations. Looking ahead to the first weekly expiry of 2024 on January 4, both Call and Put sides of the Nifty 50 exhibit Open Interest addition, suggesting an anticipated active trading session.

Stocks in Focus:
Punjab National Bank (PNB): The board approves raising up to Rs 7,500 crore in the financial year 2025 via QIP or any other mode, signalling ambitious expansion plans.
Satin Creditcare: Enters into a co-lending agreement with Karnataka Bank, expanding its reach in micro-finance.
IDFC First Bank: Receives RBI approval for ICICI Prudential AMC and ICICI Prudential Life Insurance to acquire an aggregate holding of up to 9.95% of the paid-up share capital.
Aditya Birla Fashion: Increases stake in Finesse International Design Pvt Ltd, showcasing a strategic move in the fashion industry.
RailTel: Secures work orders worth Rs 120.45 crore from South Central Railway, emphasizing its role in the development of comprehensive signalling and telecommunication infrastructure.
Swan Energy: Withdraws the proposal to issue equity shares on a preferential basis, opting instead to raise Rs 4,000 crore through a QIP or a preferential allotment.
Info Edge: Commits to investing Rs 25 crore in its wholly-owned subsidiary Zwayam Digital Pvt Ltd, demonstrating confidence in the digital market.
ICICI Lombard: Faces a GST demand of Rs 1,728 crore with a penalty of Rs 172.88 crore. The company intends to appeal against the order.
Tamilnad Mercantile Bank: Expands its footprint by opening two new branches in Dindigul and Kanyakumari District on December 29.

On the international front, Asian equities open mostly higher on the final trading day of 2023, driven by Xiaomi's unveiling of its first electric vehicle. Japan's Nikkei 225, having gained nearly 30% in 2023, emerges as the top performer in Asia.

South Korea's Kospi and Kosdaq show positive momentum, while Hang Seng's futures point to a favourable start to trade. In the US, markets remain flat but near record levels, with the Dow Jones achieving a fresh record close.

The GIFT Nifty trades unchanged against Nifty Futures Thursday close, indicating a muted start for the Indian market.

As the curtain falls on 2023, the Indian markets reflect resilience and strength, setting an optimistic tone for the year ahead. Investors will be closely watching the F&O cues, global developments, and individual stock performances to navigate the ever-changing landscape of the financial markets in 2024.