India's key stock market indices, the Sensex and Nifty 50, are anticipated to begin trading on Wednesday, December 17, with marginal gains but largely flat, following two consecutive sessions of decline. This cautious sentiment mirrors a slip in Asian markets, which tracked a subdued Wall Street close. Surprisingly soft US employment data did little to strengthen hopes for more aggressive interest rate cuts from the Federal Reserve.
Geopolitical Tensions Fuel Oil Price Surge
Adding to the complex global backdrop, crude oil prices witnessed a sharp increase. This surge followed an announcement by US President Donald Trump imposing a "total and complete" blockade on all sanctioned oil tankers operating in and out of Venezuela, significantly heightening geopolitical risks in the energy market.
On Tuesday, Indian equities closed sharply lower, pressured by the rupee hitting record lows and weak global cues dampening investor mood. The BSE Sensex plummeted 534 points, or 0.63%, to settle at 84,679.86. Similarly, the NSE Nifty 50 index dropped 167 points, or 0.64%, ending the day at 25,860.10.
Market Outlook and Technical Analysis by Jay Thakkar
Jay Thakkar, Vice President & Head of Derivatives and Quant Research at ICICI Securities, provided a detailed technical perspective on the market. He noted that the Nifty 50 closed in negative territory on the weekly expiry day and finished below the 26,000 mark, which has acted as a stiff near-term resistance.
"Now, there has been a strong call addition at 26000 levels and until it closes above it, the short-term range will be 26000-25700 levels and below that, it may extend a bit to 25500 levels as well," Thakkar stated. He added that any decisive close above 26,000 would signal a reversal from the sideways trend towards a potential upward move targeting 26,500. He pointed out that the India VIX (volatility index) has remained below 13 during this phase, suggesting this is a running correction within a medium-term uptrend.
Near-Term Stock Recommendations from ICICI Securities
Jay Thakkar of ICICI Securities has identified three stocks for near-term trading opportunities:
1. Tata Consumers Products Ltd (Buy)
Recommended buy range: ₹1,165 - ₹1,175. Stop Loss: ₹1,135. Targets: ₹1,220 - ₹1,250.
Thakkar's analysis indicates the stock broke out from a long consolidation phase, consolidated again in a narrow range, and has now seen a fresh breakout. This suggests the resumption of a new uptrend. He also noted that the Nifty FMCG Index appears to have formed a short-term base near 54,000 levels, supporting a positive sectoral outlook.
2. Tech Mahindra Ltd (Buy)
Recommended buy range: ₹1,570 - ₹1,580. Stop Loss: ₹1,525. Targets: ₹1,650.
The analyst observes that Tech Mahindra has reversed its near-term trend from down to up, accompanied by short covering. The broader IT Index has seen buying interest in the December series, turning the short-term outlook positive. The stock trading well above its Volume Weighted Average Price (VWAP) and mean indicates strong lower-end support.
3. Bharat Electronics Ltd (Sell)
Recommended sell range: ₹385 - ₹390. Stop Loss: ₹365. Target: ₹400.
Thakkar highlights that the overall Defence sector has witnessed short additions in recent weeks, with BEL facing supply pressure at higher levels. Significant call additions at strikes between ₹400 and ₹420 indicate near-term bearishness, with no major put base for the December series. The stock closing below its max pain level of ₹400 suggests this level will act as resistance.
Disclaimer: The views and recommendations are those of the individual analyst. Investors are strongly advised to consult certified experts before making any investment decisions, as market conditions are dynamic.
