Indian Stock Market: What to Expect on November 26

Indian benchmark indices, the Nifty 50 and Sensex, are expected to commence trading on a positive note today, November 26, buoyed by favorable cues from global markets. GIFT Nifty trends suggest a strong opening for the Indian benchmark index, trading around the 26,159 level, a premium of approximately 104 points compared to the Nifty futures' previous closing.

Market Performance Yesterday

Yesterday saw the Indian stock market extend its losing streak for the third consecutive session. The Nifty 50 closed below the 25,900 mark, settling the November F&O series at 25,884.80, a decline of 74.70 points or 0.29%. The Sensex mirrored this trend, falling 313.70 points, or 0.37%, to close at 84,587.01.

Key Factors Influencing Today's Trade

• Global Market Momentum: Upbeat momentum in global markets is providing a tailwind for Indian equities. Positive closes in European markets may offer underlying support to domestic indices, potentially benefiting export-oriented and cyclical sectors. Asian stocks are also on the rise, fueled by expectations of a Federal Reserve rate cut in December following weak U.S. consumer data.
• FII and DII Activity: Continuous selling by Foreign Institutional Investors (FIIs) could limit gains, while strong inflows from Domestic Institutional Investors (DIIs) might cushion sharp declines.
• Derivatives Expiry: The market is expected to remain volatile due to monthly derivatives expiry pressure.
• Technical Levels: According to Shrikant Chouhan, Head of Equity Research at Kotak Securities, the 85,000-85,200 zone will likely act as a key resistance area for the Sensex. As long as the Sensex trades below this level, a weak sentiment is expected to prevail. On the downside, 84,300 could serve as immediate support for the bulls, with a potential slip to 84,000 if this level is breached. A successful breakout above 85,200 could propel the Sensex towards 85,500-85,700.
• Nifty OI Data: Nifty derivatives data indicates strong call writing at the 26,000 strike, with maximum put open interest at 25,800, suggesting firm demand at lower levels. Amruta Shinde, Technical & Derivative Analyst at Choice Equity Broking, believes a sustained close above 26,000 is crucial to revive bullish momentum and unlock further upside potential.
• Volatility: With the India VIX declining, intraday swings may remain contained, leading to selective trading opportunities.

Expert Outlook

Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services Ltd, noted the weakness in frontline indices amid mixed global cues and profit-booking. He pointed out that despite pressure on largecaps, midcaps and smallcaps managed to post marginal gains.

Brokerages suggest the Nifty is likely to consolidate between 25,700 and 26,250 in the coming sessions. Analysts at Bajaj Broking Research observed that the Nifty has formed a third consecutive bearish candle, signaling a continuation of profit booking.

Vaishali Parekh, Vice President of Technical Research at Prabhudas Lilladher, anticipates a slightly cautious bias in the Nifty 50 index. According to Parekh, the index requires a move past the 26,000 level to regain conviction and aim for higher targets of 26,500 and 27,200 in the coming days.

Stocks to Watch

Several stocks are expected to be in focus today, including India Glycols, Bharat Electronics Ltd., Paras Defence and Space Technologies Ltd., and Muthoot Microfin.

Important Considerations

• Investors should remain cautious ahead of the U.S. inflation data release.
• The Indian stock market is subject to market risks, and investors should carefully read all related documents before investing.
• Sectoral trends are expected to be mixed, with realty and metal sectors potentially witnessing buying interest.