Week Ahead: F&O expiry, IPOs & listings, FII activity, global cues among key market triggers for Sensex, Nifty | Stock Market News

The Indian stock market recorded its steepest weekly decline in almost two-and-a-half years after bears dominated bulls, dragged by weak global and domestic market cues and a sharp mid-week turn of foreign capital outflow.

In the fourth week of December, investors will closely monitor key market triggers, including new listings, domestic and global macroeconomic data, foreign fund inflows, US bond yields, crude oil prices, and other global cues.

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Domestic equity benchmarks Sensex, and Nifty 50 faced significant pressure, shedding five per cent and wiping out the gains of the past four weeks over risk aversion in global markets following the hawkish stance of the US Federal Reserve. After a subdued start, the frontline indices declined daily, closing near the week’s lows at 23,857.5 and 78,041.59, respectively.

Foreign investors’ persistent selling, coupled with the hawkish tone of the US Federal Reserve, disrupted the recovery phase. Reflecting the broader sentiment, all key sectors except pharma ended lower, with metals, energy, and banking taking the hardest hits. The broader indices succumbed to pressure in the final sessions, shedding over 3.5 per cent each. Nifty fell below its 200-day moving average for the first time in a month. 

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Nifty 50 snapped a four-week winning streak. The index erased nearly 80 per cent of the gains accumulated over the past four weeks, plunging 1,180 points or 4.77 per cent. The Bank Nifty declined over five per cent, while the Sensex fell below the crucial psychological mark of 80,000.

The sell-off was driven by multiple factors, with profit-booking by foreign investors at higher levels ahead of Christmas and year-end holidays emerging as a key trigger. A surprise uptick in the India VIX also heightened the market fear.

Equity investors became poorer by ₹18.43 lakh crore in five days of the market crash, as the BSE benchmark Sensex tanked 4,091 points or 4.98 per cent. The market capitalisation of BSE-listed firms eroded ₹18,43,121.27 crore to ₹4,40,99,217.32 crore (or $5.18 trillion) in the last five days.

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On Wednesday, the US Fed cut rates as expected but scaled back its forecast to two reductions in 2025 from four earlier. US rate cuts help emerging markets assets, such as Indian equities, by boosting foreign inflows.  The scheduled expiry of December’s derivative contracts may amplify volatility in the coming week.

“The sharp sell-off in heavyweight sectors like banking and IT, which had previously supported the market, has shifted the bias back to bearish. Weakness in the rupee and a relatively stronger US market performance driving outflows are compounding the current challenges,” said Ajit Mishra – SVP, Research, Religare Broking Ltd.

This week, the primary market will witness intense action as some new initial public offerings (IPO) and important listings are slated across the mainboard and small and medium enterprises (SME) segments. The week will be critical from the domestic and technical point of view as investors will track domestic developments, global markets and macroeconomic data.
 

Here are the key triggers for stock markets in the coming week:

3 new IPOs, 8 listings to hit D-Street

In the mainboard segment, only Unimech Aerospace IPO will open for subscription this week on December 23. Among the ongoing issues, Transrail Lighting IPO, DAM Capital Advisors IPO, Mamata Machinery IPO, Sanathan Textiles IPO, and Concord Enviro IPO will close for bidding on December 23. 

Ventive Hospitality IPO, Senores Pharmaceuticals IPO, and Carraro India IPO will close for subscription on December 24. In the SME segment, two new SME issues will open for bidding in the coming week. 

Also Read: Transrail Lighting IPO: Latest GMP, review, subscription status, other details; Issue ends on Monday— Apply or not?

Among listings, shares of Transrail Lighting, DAM Capital Advisors, Mamata Machinery, Sanathan Textiles, and Concord Enviro will debut on stock exchanges BSE, NSE on December 27. Additionally, shares of three SMEs will get listed on either BSE SME or NSE SME in the coming week.

FII Activity

High US bond yields and a strengthening dollar have weighed on emerging markets like India, with foreign institutional investor (FII) activity remaining a critical factor influencing Indian equities in the near term.

“Amid heightened volatility and persistent FII selling pressure, investors will likely adopt a cautious stance. Many are expected to await signs of market stabilization before increasing exposure to large-cap stocks, particularly in sectors most affected by FII sell-offs,” said Pravesh Gour, Senior Technical Analyst at Swastika Investmart Ltd.

Despite recent weakness, the market outlook remains cautiously optimistic. However, relentless selling by FIIs has added to market pressure. According to NSDL data, FIIs sold over ₹15,828 crore in the secondary market last week, while domestic institutional investors (DIIs) provided some support by purchasing over ₹11,874 crore during the same period.

“FIIs, net buyers in the first two weeks of December, turned net sellers amid a shift toward yielding assets like US bonds following the US Fed’s revised projection of two rate cuts in 2025, down from four previously projected. This shift saw US 10-year bond yields rise by three per cent, and the dollar index gained nearly one per cent for the week,” said Puneet Singhania, Director at Master Trust Group.

Global Cues

Global economic indicators—including US bond yields, dollar index performance, US initial jobless claims, US new home sales data, and US Durable Goods Orders data—will be pivotal in shaping the market direction this week. The global stock markets will remain closed on Wednesday, December 25, in observance of Christmas. Markets are reflecting a “Santa effect” but in red, as heavy profit booking was witnessed before Christmas.

Also Read: US Fed lowers benchmark rate to 4.25-4.50% for third straight meeting, eyes two cuts in 2025; 5 key highlights

Oil Prices

International crude oil prices settled little changed in the previous session after markets weighed weak Chinese demand and fewer interest rate-cut expectations by the US Federal Reserve after recent prints of US inflation.

Brent crude futures closed up six cents, or 0.08 per cent, to settle at $72.94 a barrel. US West Texas Intermediate crude futures rose eight cents, or 0.12 per cent, to settle at $69.46 per barrel. Both crude oil benchmarks ended the week down about 2.5. Back home, crude oil futures settled 0.1 per cent higher at ₹5,944 per barrel on the multi-commodity exchange (MCX).
 

Corporate Action

Shares of several companies, including Vedanta, will trade ex-dividend in the coming week, starting from Monday, December 23. Shares of NMDC will trade ex-bonus, while Mazagon Dock Shipbuilders will trade ex-split in the coming week. Check full list here

Technical View

From a technical perspective, the Nifty has breached a critical long-term moving average support and is now nearing the November low of 23,263.15. According to Ajit Mishra of Religare Broking, breaching this level could intensify the downward trend, potentially pushing the index to 22,700. The 24,000–24,400 zone would act as a strong resistance in case of a rebound.

Among sectoral indices, pharma and healthcare appear resilient, while IT is approaching a critical support zone. According to Mishra, energy has entered an extremely oversold territory, which could trigger a short-term bounce. 

“In the banking index, significant support lies at the long-term moving average of around 50,400 and at the November low of 49,787.10. Conversely, auto, PSE, and metal sectors may continue to underperform in the near term. Traders are advised to adjust their positions accordingly, keeping a strong emphasis on risk management,” said Mishra.

Nifty 50 experienced a significant breakdown, losing 4.77 per cent this week and closing near 23,600, below the crucial 23,800 support level and the 21-week-EMA. This triggered broad-based selling across sectors.

Market experts say the broader market sentiment remains bearish, with a “sell-on-rise” approach prevailing. Traders should exercise caution, closely monitoring support and resistance levels amid heightened volatility and weak technical signals.

Bank Nifty witnessed a sharp decline from its all-time highs, dropping 5.27 per cent this week and forming a strong bearish candle on the weekly chart. It closed below the 21-week EMA near 50,800. Key supports are positioned at 50,200 and 49,800, where prices will likely stabilize. 

“On the upside, the resistance zone lies at 51,000-51,200, with a breakout potentially leading to 51,900. The overall strategy remains bearish, favouring selling near resistance levels as the index struggles to regain upward momentum amidst negative technical signals,” said Puneet Singhania of Master Trust Group.

Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts, consider individual risk tolerance, and conduct thorough research before making investment decisions, as market conditions can change rapidly, and individual circumstances may vary.