Trade Setup: Nifty Hovers Near Record High Levels; IPO Frenzy Continues

The Nifty index wrapped up 2023 with a 17.5% annual gain, but not without a few bumps along the way. Despite closing higher in three out of five trading sessions, a sharp sell-off on Wednesday resulted in a marginal weekly loss. From its March low of 16,828, the Nifty surged by nearly 4,500 points over the past nine months, showcasing the resilience of the Indian stock market.

As the financial world gears up for the last week of the year, global institutions are winding down for their New Year holidays, leading to anticipated reduced market participation. However, the IPO mania shows no signs of slowing down, with more listings expected in the upcoming week.

In Friday's trading session, foreign investors continued their trend as net sellers, while domestic institutions took the opposite stance, emerging as net buyers in the cash market. Amidst this dynamic market environment, analysts are closely watching the 20-Day Exponential Moving Average (DEMA) for the Nifty 50, which, if breached at 20,850 - 20,900, could trigger a corrective phase.

While the Nifty 50 displayed resilience, the Nifty Bank experienced a downturn, ending the week 1.3% lower. Despite a few weeks of outperformance, the Nifty Bank struggled to surpass the 48,000 mark, encountering strong resistance.

Looking at the Futures and Options (F&O) landscape, Nifty 50's December futures recorded a 0.5% gain and a 33% increase across the series. Currently trading at a premium of 52.95 points (down from 95.35 points earlier), it indicates a cautious market sentiment. Conversely, Nifty Bank's December futures saw a 6.3% decline in Open Interest and a 40% decrease across the series.

In the F&O ban list, NALCO entered, while Manappuram Finance and RBL Bank exited. Stocks like Ashok Leyland, India Cements, SAIL, Balrampur Chini, Delta Corp, and Hindustan Copper continued to remain in the F&O ban.

The Put-Call Ratio for Nifty 50 stood at 1.18, up from 1.11, indicating a cautious approach among traders.

Several stocks are poised to make waves in the upcoming week:
Reliance Industries: Rumors circulate about a potential merger with Walt Disney's Indian media operations.
Infosys: A global client terminates a potential $1.5 billion contract signed in September.
Paytm: The company announces an AI-led transformation, leading to a slight reduction in operations and marketing workforce.
UPL: Board approves raising Rs 4,200 crore via a rights issue.
Wipro: Denies rumours of former L&T Infotech CEO Sanjay Jalona joining the company.
Anupam Rasayan: Signs a Letter of Intent worth $61 million with a leading Japanese multinational chemical company.
Adani Wilmar: Promoters intend to sell up to 1.24% stake in the open market to achieve Minimum Public Shareholding.
Biocon: Partners with Sandoz for the distribution of Adalimumab BS Subcutaneous injection in Japan.
Aurobindo Pharma: Receives 10 observations from the USFDA for its manufacturing unit in New Jersey.

As global markets wind down for the Christmas holiday, US equities marked their eighth consecutive weekly advance, with the S&P 500 nearing its record close. The Dow Jones witnessed its best eighth-week advance since 2019. November's Core Personal Consumption Index rose in line with expectations.

Asia-Pacific stock markets were subdued Tuesday, with Japan opening flat but still set to wrap up the year as one of the region's top performers. Several markets including Australia, New Zealand and Hong Kong were shut on account of Boxing Day.

Back home, the GIFT Nifty is trading with mild gains against Nifty Futures Friday close, hinting at a positive start for the Indian market. As investors bid farewell to 2023, the market remains a hotbed of activity, with IPOs, stock movements, and global cues shaping the financial landscape.