Trade Setup For Dec. 20: Nifty 50's Support Seen At 23,850 As Fed's Hawkish Tilt Weakens Sentiment

The sentiment at the stock market is expected to remain weak after the US Federal Reserve's hawkish tilt, analysts said, after the benchmark indices slipped for a fourth consecutive day on Thursday.

The support for NSE Nifty 50 is placed at 23,850 level, according to Rupak De, senior technical analyst at LKP Securities. On the other hand, the resistance for the index is seen at 24,200, he added.

Nifty 50 has formed a probable double bottom formation around its 200-day moving average support, said Aditya Gaggar, director of Progressive Shares Brokers Pvt. “A strong move above 24,200 is necessary to validate the reversal whereas a break below 23,900 will drag the index further lower to 23,760,” he added.

For Bank Nifty, the 52,000 level will act as an immediate resistance followed by 52,500 level, said Hrishikesh Yedve, assistant vice president technical and derivatives research at Asit C. Mehta Investment Interrmediates Ltd.

The 200-day simple moving average for the index is near 50,480 level, providing strong support, Yedve said. “As long as the index holds above 50,480, a relief rally remains possible, but a significant up move would require the index to clear the 52,500 hurdles."

GIFT Nifty is 0.32%, or 77.5 points down at 23,929. 

Most Asian stocks were trading lower this morning, reflecting cautious sentiment following mixed US market movements. The Federal Reserve's hawkish stance continues to weigh on US equities and bonds, while supporting the dollar.

In Asia, shares are mostly lower. The S&P ASX 200 in Australia slid 1.07%, while South Korean stocks also saw losses. The Hang Seng is also pointing lower, adding to the bearish sentiment. However, Japan’s Nikkei 225 edged higher by 0.07%, benefiting from a weakened yen. As of 06:37 a.m., the Nikkei 225 stood at 38,840.97.

US markets also faced volatility. The S&P 500 ended Thursday's session marginally lower, struggling to recover from a selloff earlier in the week. The Nasdaq 100 dropped 0.5%, while the Dow Jones Industrial Average posted a slight gain of 0.04%. The choppy session followed the Federal Reserve’s reduction of rate-cut expectations for next year, with US economic data showing resilience, which diminishes the urgency for imminent rate cuts.

In commodities, Brent crude fell 0.69%, trading at $72.88 a barrel, while gold edged up 0.04%, at $2,595.01 an ounce.

Key Levels 

• US Dollar Index at 108.40.

• US 10-year bond yield at 4.55%.

• Brent crude down 0.69% at $72.88 per barrel.

• Bitcoin was down 0.76% at $96,587. 

• Gold spot up 0.04% at $2,595.01

India's frontline equity indices recorded the lowest closing since Nov. 28, tracking global negative sentiment following hawkish commentary by the US Federal Reserve.

The NSE Nifty 50 closed 247.15 points or 1.02% down at 23,951.70, and the BSE Sensex ended 964.15 points or 1.2% lower at 79,218.05.

Overseas investors stayed net sellers for the fourth consecutive day and collectively offloaded stocks worth Rs 12,230.3 crore. Domestic institutional investors stayed net buyers for the third straight day.

The foreign portfolio investors offloaded stocks worth approximately Rs 4,224.9 crore and the DIIs bought stocks worth Rs 3,943.2 crore on Thursday.

Nifty December futures dropped by 0.97% to 24,021, trading at a premium of 70 points.

The open interest for Nifty December futures decreased by 1.95%.

For the Dec. 26 expiry of Nifty options, the maximum call open interest stands at 25,000, while the maximum put open interest is at 24,000.

• Bharti Airtel: The company has prepaid Rs 3,626 crore to settle all liabilities for spectrum acquired in 2016. In total, it has cleared Rs 28,320 crore of spectrum liabilities in 2024.

• Mazagon Dock Shipbuilders: The company commenced production activity for the first of the 14 fast patrol vessel for the Indian Coast Guard, with the project valued at Rs 1,070 crore.

• EPL: The company approved the incorporation of subsidiary in Thailand, which is proposed to be incorporated pursue growth opportunities in manufacturing and trading of laminated tubes in Thailand. Additionally, company to invest an amount of up to 2 million Thai Baht (~Rs. 5 million) for 100% capital of subsidiary.

Indian rupee fell past the psychologically crucial mark of 85 a dollar at open after the dollar index touched the highest level in over two years.

The index rose and pressured emerging–market currencies as the US Federal Reserve guided for fewer rate cuts.