India's Nifty 50 may continue to experience bouts of volatility on Tuesday as participants would look to digest mixed macro data and geopolitical tensions emerging around the Indo-China border in Arunachal Pradesh.
On the geopolitical front, Indian and Chinese troops faced off at the Line of Actual Control (LAC) in Arunachal Pradesh, resulting in injuries on both sides, according to the Indian Army.
With regards to macros, the Consumer Price Index for November came in below RBI's 6 percent target range for the first time in 10 months at 5.88 percent. The figure is below the street estimate of 6.33 percent. However, the Index for Industrial Production contracted 4 percent in October, way below street expectations of a 0.8 percent contraction.
On Monday, Indian markets closed flat in a choppy and rangebound session. The Nifty 50 index managed to eke out a one point gain while the Sensex shed 50 points after declining as much as 500 points in early trade. Oil marketing companies were the outperformers on correcting crude and positive brokerage commentary while PSU Banks continued to surge after another lender received an upgrade.
"Everybody is really looking to India as a source of growth. So whether it's R&D, whether it's manufacturing, the biggest growth market is India. And so everybody's focused on it," Punita Kumar Sinha of Pacific Paradigm Advisors told CNBC-TV18 in an interview.
"If you talk about valuations, of course, valuations in India are at a high, as the markets outperformed. So I suspect when the growth begins to come back into the other economies, then maybe we will see people shift out of India to some of the other emerging markets," she said.
What do the charts suggest for Dalal Street?
Nagaraj Shetti of HDFC Securities says that the Nifty not showing any sharp follow-through weakness on Monday can signal chances of a false downside breakout at the said resistance. However, he said that the short-term trend remains negative.
As far as the Nifty Bank is concerned, the index will continue to consolidate in the range of 43,000 - 44,000 where the highest amount of Open Interest is on the put and call side respectively, according to Kunal Shah of LKP Securities.
Here are key things to know about the market ahead of the December 13 session:
SGX Nifty
On Tuesday, Singapore Exchange (SGX) Nifty futures — an early indicator of the Nifty index — gained 49 points points or 0.26 percent to 18,647, thereby pointing to a positive opening for the market.
Global Markets
Benchmarks on Wall Street managed to recoup some of last week's losses on Monday as investors anticipate the outcome of the Federal Reserve meeting and the latest inflation data.
The Dow Jones added over 500 points, closing above the 34,000 mark for the first time since December 2. Additionally, the S&P 500 gained 1.4 percent, while the Nasdaq added 1.3 percent.
What to expect on Dalal Street
Siddhartha Khemka of Motilal Oswal Financial Services believes that the market will remain side-ways until the overhang of central banks is out of the way. He expects stocks like defence, tyre, FMCG and paint companies to do well on the back of falling commodity prices and news flow.
Ruchit Jain of 5paisa.com expects 18,450-18,350 to be an immediate support for the Nifty 50 and until this holds, he wants traders to look for stock-specific buying opportunities. On the higher side, he expects 18,600 - 18,700 to be an immediate resistance for the index.
LKP's Shah wants investors to have a buy-on-dips approach on the Nifty Bank as the structure remains bullish with immediate support at levels of 43,400.
Key levels to watch out for
For this week's options expiry, the Nifty 50's 18,600 Call strike added 23.5 lakh shares in Open Interest, followed by the 18,500 call and the 18,400 call, which added 11.35 lakh and 7.21 lakh shares in Open Interest respectively.
On the downside, the 18,400 strike Put added 26 lakh shares in Open Interest, while the 18,300 Put added 24.7 lakh and the 18,500 Put added 22.3 lakh shares in Open Interest.
Stocks like GNFC, Punjab National Bank, Delta Corp, and BHEL continue to remain in the F&O ban.
FII/DII activity
Long build-up
Here are five stocks that saw an increase in open interest as well as price:
| Stocks | Current OI | CMP | Price Change | OI Change |
| Dalmia Bharat | 15,99,000 | 1,925.40 | 3.76% | 17.79% |
| Honeywell Automation | 38,055 | 43,735.10 | 4.66% | 9.92% |
| Interglobe Aviation | 31,09,200 | 2,072.10 | 3.21% | 7.77% |
| Apollo Tyres | 1,42,59,000 | 325.25 | 2.47% | 5.79% |
| HPCL | 2,17,51,200 | 253.05 | 4.65% | 5.10% |
Short build-up (Decrease in price and increase in open interest)
| Stocks | Current OI | CMP | Price Change | OI Change |
| United Breweries | 12,42,800 | 1,780.75 | -0.18% | 15.07% |
| Metropolis Healthcare | 10,29,300 | 1,388.70 | -2.75% | 10.53% |
| Navin Fluorine | 4,75,650 | 4,249.90 | -3.20% | 9.19% |
| Alkem Laboratories | 2,61,400 | 3,109.45 | -0.38% | 6.35% |
| Crompton Consumer | 48,03,000 | 353.75 | -0.95% | 5.85% |
Short Covering (Increase in price and decrease in open interest)
| Stocks | Current OI | CMP | Price Change | OI Change |
| Punjab National Bank | 19,03,04,000 | 58.40 | 3.09% | -9.52% |
| Coal India | 2,52,75,600 | 234.20 | 1.87% | -6.22% |
| Berger Paints | 60,18,100 | 623.05 | 0.55% | -5.43% |
| Info Edge | 12,16,250 | 4,076.05 | 1.03% | -5.24% |
| Indian Hotels | 3,16,37,052 | 334.80 | 1.04% | -4.72% |
Long Unwinding (Decrease In Price & Open Interest)
| Stocks | Current OI | CMP | Price Change | OI Change |
| Dixon Technologies | 5,56,125 | 4,030.00 | -2.34% | -4.03% |
| Shree Cement | 2,23,900 | 24,303.65 | -0.80% | -3.67% |
| Colgate-Palmolive | 25,07,400 | 1,660.05 | -0.39% | -2.89% |
| IEX | 4,88,85,000 | 145.30 | -0.31% | -2.76% |
| Motherson Sumi | 8,77,70,250 | 72.80 | -0.88% | -2.08% |
First Published: Dec 13, 2022 5:27 AM IST
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