Any progress in the US-China trade negotiations, macro data, and stock-specific action will keep traders busy this week even as the expiry of November series derivative contracts is set to increase volatility in the equity markets.
In terms of macro data, the July-September quarter gross domestic product (GDP) is scheduled to be released post market hours on Friday. Investors will also be on the lookout for any government announcement on economic policies and disinvestment.
On Friday, Asia Index announced that Tata Motors, Tata Motors DVR, Yes Bank, and Vedanta will be dropped from the BSE's benchmark Sensex from December 23. In their places, UltraTech Cement, Titan Co Ltd and Nestle India will be added in the index. The respective stocks will react today.
Also, the rebalancing of MSCI indices will take place on November 27. Berger Paints India, Colgate-Palmolive, DLF, HDFC Asset Management Company, ICICI Prudential Life Insurance, Info Edge, SBI Life Insurance and Siemens India will be added to MSCI India Index. Conversely, four stocks -- Glenmark Pharma, Indiabulls Housing Finance, Vodafone Idea and Yes Bank will be axed from the index.
Investors will also keep a close eye on the Karvy saga. Market regulator Sebi on Friday barred Karvy Stock Broking Ltd from taking new clients with respect to stockbroking activities for alleged misuse of clients' securities.
Markets would also be influenced by factors such as rupee-dollar trend, oil prices and investment pattern by overseas investors. Foreign portfolio investors continued their buying spree last week and have infused a net Rs 17,722 crore into the Indian markets in November so far.
Asian shares made guarded gains on Monday. MSCI’s broadest index of Asia-Pacific shares outside Japan bounced 0.26 per cent, Japan’s Nikkei firmed 0.8 per cent in early trade, while Australian stocks rose 0.5 per cent. The SGX Nifty was also trading higher in the early hours, indicating a flat to positive start for the domestic indices.
In commodities, oil prices held near two-month highs and Brent crude futures firmed 19 cents to $63.58.
On Friday, the Sensex inched slumped 216 points to close at 40,359, and the Nifty50 index ended 54 points lower at 11,914 level. According to analysts, traders should try to book profits at higher levels this week, as market has maximum call open interest at 12,000 which will act as major resistance levels for the weekly expiry, and 11,900 will act as support.
Here's a trading idea by by CapitalVia Global Research Limited who recommend buying HDFC above Rs 2,242 for the target of Rs 2312 with stop-loss at Rs 2,198.