It was a day of hits and misses as markets closed flat on December 31, the F&O expiry day, after scaling new peaks. The S&P BSE Sensex, which hit a record high of 47,896, closed with marginal gains of 5 points at 47,751, while the Nifty50 surpassed 14,000 for the first time when it touched 14,024 but closed flat with a negative bias.
Sectorally, action was seen in realty, consumer durables, consumer discretionary and metal stocks, while profit booking was seen in telecom, FMCG, energy and oil & gas space.
Experts are of the view that muted global cues and profit-booking at higher levels led to fall in the Indian markets. Auto sales numbers, global markets and FII flows will dictate the trend in the coming week.
"In a choppy trading session, the Indian markets traded in a tight range amidst stable global cues. The Nifty index ended flat at 13,982 levels. On the sector front, consumer durables, realty, healthcare ended with decent gains," Ajit Mishra, VP-Research, Religare Broking Ltd, told Moneycontrol.
"The investors would await the auto sales numbers and PMI data as it would help in gauging the economic recovery. Further, global cues are likely to dictate the trend for the markets in the near term. We reiterate our cautious stance on the markets."
Here is what experts think that investors should do on January 1:
Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities
On the last day of the December F&O series, the Nifty hit yet another all-time high of 14024.85. The Sensex also registered a fresh all-time high of 47896.97.
In December, the Sensex rallied near 8 percent. A sharp rally from 44,000 to 47,800 clearly suggests that the bulls are in control and heading towards 48,000-48,500. Technically, post strong uptrend rally, the index formed a small-bodied Doji reversal formation near an important resistance level.
The texture of charts suggests that the short-term trend is still up but an intraday correction can't be ruled out if the index trade below 13,935.
For the trend-following traders, 13,935 should be the sacrosanct level to watch. Trading below the same, a quick correction to 13875-13850 can be expected.
On the flip side, 14025 would be the immediate hurdle for the day traders and above it, an uptrend till 14,075-14,125 is possible.
Vinod Nair, Head of Research at Geojit Financial services
Markets reached an all-time high on the final day of a tumultuous 2020, which saw deep market corrections and unexpected rebounds. However, the European markets lost steam on the final trading day owing to the pandemic and reports regarding an increased tariff on EU products by the United States.
Despite the havoc created by the COVID-19 pandemic, the economy is expected to recover in 2021, giving a boost to the equity markets in addition to upgrades in corporate earnings.
Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services Limited
The Nifty formed a Doji candle on the daily scale but has continued making higher lows for the last six sessions as supports are gradually shifting higher.
Now, the index has to hold above 13,850 for a fresh rally towards 14,200 then 14,500 zones, while on the downside, major support exists at 13,777 and 137,00 levels.
Sumeet Bagadia, Executive Director, Choice Broking
The Indian benchmark equity indices ended a choppy session on a flat note. In the process, the Nifty breached an all-time high level of 14,000 intraday but closed flat at 13,981.75.
Volumes on the NSE were higher than the previous session. Some major Asian bourses were closed for the New Year’s holidays, the handful that remained open edged up to end a tumultuous 2020 at record highs.
European stocks dropped in thin trading on the final trading day of a rollercoaster year even as tighter coronavirus restrictions in Britain and a move by the United States to raise tariffs on some EU products dampened sentiment.
Despite low institutional presence, the broader markets continue to do well. There are no negative triggers on the horizon and hence the gradual move up could continue.
Rahul Mishra, AVP (Derivatives), Emkay Global Financial Services
December is considered a good month for the market, as in the last 20 years it has given a positive close more than 70 percent of times. The year 2020 even being one of the worst years is no exception.
The Nifty has gained almost 8 percent during the month. The momentum is so strong that it took in its stride the new coronavirus strain and touched a record high in the month.
FIIs continued to be net buyers in cash; there were only two instances in the last two months where FIIs had net outflow. December has seen a total Inflow of around Rs 45,000 crore, which is the second-highest in the last 12 years after November 20 where net buy flow was Rs 65,000 crore.
The Nifty may face a good resistance around 14,000 levels, however, we may see higher levels in the coming month if supported by upcoming quarterly results. Many of the stocks are trading in the overbought zone and we suggest a stock-specific approach while investing.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.