Indian stock markets began Thursday's trading session on a subdued note, with both key indices showing little movement in early trade. The subdued opening comes amidst thin trading volumes, a typical phenomenon as the calendar year approaches its end. Market participants are also bracing for potential swings due to the expiry of monthly derivatives contracts.
Benchmarks Show Muted Start
The benchmark S&P BSE Sensex opened with a marginal gain, hovering near the 72,271.94 mark. Similarly, the broader Nifty 50 index started virtually unchanged around the 21,741.90 level. This flat opening on December 28, 2023, reflects a cautious stance among investors during the holiday-thinned week.
Market experts pointed out that the trading activity is expected to remain low-key. The reduced participation from major global investors, coupled with a lack of fresh domestic triggers, has led to this range-bound movement. The focus is now shifting towards the year-end and the upcoming quarterly results season.
Derivatives Expiry Adds a Layer of Uncertainty
A significant factor that could disrupt the calm is the scheduled expiry of December series futures and options (F&O) contracts. Analysts have flagged that this expiry, falling on the last Thursday of the month, could inject short-term volatility into the markets.
Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd, advised traders to remain vigilant. He noted that the market might experience erratic movements as traders roll over or square off their positions in the derivatives segment. This event often leads to heightened activity in specific stocks and indices, even in an otherwise quiet market.
Sectoral Performance and Stock Action
In early trade, the sectoral landscape presented a mixed picture. The Nifty Realty index emerged as a notable gainer, while the Nifty FMCG and Pharma indices also traded with positive bias. On the other hand, sectors like IT and Media showed some weakness.
At the individual stock level, specific companies were in the spotlight. Shares of Zee Entertainment Enterprises Ltd (ZEEL) witnessed significant buying interest, surging over 10%. This rally followed reports of a potential merger progress with Culver Max Entertainment (formerly Sony Pictures Networks India). Conversely, Vodafone Idea saw its shares decline after a recent sharp upmove, highlighting the stock-specific action dominating the market.
Other stocks that saw notable movement included:
- Indus Towers: Trading higher.
- Bajaj Auto: Gaining on positive sentiment.
- Hindustan Copper: Witnessing selling pressure.
Outlook for the Final Trading Sessions
As the year winds down, the overall market sentiment is being shaped by a combination of factors. The lack of major global cues, with several international markets closed for holidays, contributes to the low-volume environment. Domestically, investors are assessing macroeconomic indicators and corporate earnings expectations for the coming quarter.
Experts suggest that the immediate trend for the Nifty 50 will depend on its ability to hold above the 21,700 support zone. A decisive break below this level could lead to further consolidation. On the upside, the index faces resistance near the 21,850-21,900 range. The advice for traders in this environment is to adopt a selective, stock-centric approach while being mindful of the increased volatility risk due to the F&O expiry event.
In summary, the Indian equity markets are navigating the final sessions of 2023 with caution. While the flat opening indicates a pause, the derivatives expiry remains a wildcard that could trigger sharper moves before the year concludes.
