Trade Setup: Markets Eye Weekly Options Expiry, Nifty & Sensex Likely To Rally For Another High

The Nifty 50 continues its roller coaster ride, oscillating around key levels. As investors grapple with uncertainties, Wednesday's weekly options expiry session holds the potential to provide direction amidst a mixed bag of F&O cues.

Over the last several trading sessions, the Nifty 50 has displayed a consistent pattern of rebounding from minor dips, solidifying its status as a buy-on-dips market. On Tuesday, the index dipped to an intraday low of 21,339, only to recover nearly 200 points, briefly breaching the 21,500 mark in the final hour of trade. However, the failure to sustain above this level, coupled with a lack of support from banking stocks, leaves the market in suspense.

The absence of substantial support from banking stocks has been a notable factor hindering the Nifty's ascent. The index, despite remaining nearly unchanged from Monday's levels, faces a pivotal juncture as investors keep a keen eye on the weekly options expiry session on Wednesday. The outcome could potentially dictate the trajectory of the banking index and, consequently, the Nifty.

Futures and Options (F&O) data for December indicates a surge in Open Interest for Nifty 50's December futures, with a premium increase of 74.65 points. However, banking heavyweight reliance on index sustenance remains a concern. Foreign investors continued to be net sellers in the cash market, contrasting with domestic investors who were net buyers. The F&O ban list saw the inclusion of companies like Indus Towers, Delta Corp, IRCTC, Piramal Enterprises, and RBL Bank.

As the markets brace for Thursday's weekly options expiry, the Nifty 50 Call strikes between 21,500 and 21,950 have witnessed Open Interest addition, while the 22,100 strike has seen shedding in Open Interest. On the Put side, the Nifty 50 strikes between 20,950 and 21,450 have seen an Open Interest addition, while the 20,600 strike has seen a reduction. This sets the stage for a potential tug-of-war between bulls and bears in the coming days.

In the spotlight ahead of Tuesday's trading session are several stocks poised for potential market impact:

Accenture reported a 3% growth in US Dollar revenue and a 1% growth in Constant Currency. The company maintains its financial year 2024 constant currency growth outlook between 2% and 5%.

IndusInd Bank plans to sell up to 2.86% equity via block deals in Nippon AMC, with a floor price of Rs 426.6, representing a 5% discount to Tuesday's closing price. The offer size for the block deal is pegged at Rs 762 crore.

Astral promoters are looking to sell 2-3% equity via block deals, potentially fetching Rs 1,000 crore - Rs 1,500 crore. The last promoter stake sale in 2019 involved a 2.4% equity sale.

Blackstone is likely to sell a 23.5% stake in a clean-out trade in Embassy Office Parks REIT, with a floor price fixed at Rs 310 per share, aiming to fetch $833 million.

JK Tyre launches a Qualified Institutional Placement (QIP) to raise funds, with a floor price of Rs 358.96, representing a 5.2% discount from Tuesday's closing price.

Varun Beverages is set to acquire The Beverage Company in South Africa for Rs 1,320 crore and sign an MoU with the Jharkhand government for a manufacturing plant in Patratu with an outlay of Rs 450 crore.

BPCL plans to set up a Polypropylene unit project at its Kochi refinery with a cost of Rs 5,044 crore. UPL board meeting on December 22 to consider fundraising. RVNL emerges as the lowest bidder for Varkala Sivagiri station in Kerala at a project cost of Rs 124 crore.

Delhi High Court orders removal of the "fraud" tag from Religare Finvest. CCI approves the acquisition of majority shareholding in Glenmark Life by Nirma. Mohit Joshi takes charge as MD & CEO of Tech Mahindra.

On the global front, U.S. stocks witnessed a positive surge, with the S&P 500 edging closer to its record high and the Nasdaq Composite breaching the 15,000 mark for the first time since January 2022. Asian markets, including Japan and Australia, experienced gains, contributing to an overall optimistic sentiment. The GIFT Nifty's premium of over 80 points from Nifty Futures Tuesday close signals a potential gap-up opening for the Indian market.

As the market navigates through a maze of economic indicators, global cues, and corporate developments, the upcoming weekly options expiry session on Wednesday looms large. Investors eagerly await signals from the banking sector, while the Nifty's resilience in the face of external pressures remains a testament to its buy-on-dips nature.