Nifty and Sensex managed to sustain positive momentum for the fourth consecutive week by recording a weekly gain of 0.5% amid consolidation.

"Currently, the market is anticipating a revival in consumer spending, driven by the festive season and year-end holidays, adding to the sentiments. Additionally, the expectation of an increase in US spending is propelling the IT sector," said Geojit's Vinod Nair.

Traders are, however, cautious ahead of the US Federal Reserve policy meeting and domestic macroeconomic data releases this week.

Here are all the key factors you need to track:

1) Fed meeting outcome

Global markets will be eyeing the outcome of the US Fed meeting on 18 December, where a 25 basis point rate cut is already factored in. The Fed's commentary on future rate policy will hold significant importance.

2) Macro data

Besides the US Fed, Bank of England and Bank of Japan are also going to announce their monetary policy during the week. While BoE is expected to hold interest rates on Thursday, Japan is also largely believed to skip hiking rates on Thursday.

Market participants will closely monitor the HSBC Composite PMI, HSBC Manufacturing PMI, and HSBC Services PMI.

3) FII action

With FIIs having bought equity for Rs 14,435 crore through exchanges till 13th December, it is believed that FII selling has subsided, at least in the short to medium term, which will add further impetus to the sentiment.

"Even though FIIs have turned buyers in December, they have been large sellers, too, on certain days. This indicates that at higher levels, they may again turn sellers since Indian valuations continue to be relatively high compared to other markets. Rising dollar is another concern which might prompt FIIs to sell at higher levels," said Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services

4) Global markets

Wall Street ended the week little changed in a subdued session on Friday, with the S&P 500 and Dow posting weekly declines, while the Nasdaq secured its fourth consecutive week of gains

5) Technicals

From a technical perspective, analysts say a decisive move above 24,800 on Nifty could trigger further recovery toward the 25,200–25,500 zone. On the downside, the 24,300–24,400 zone is expected to provide strong support on a closing basis.

"We maintain a “buy on dips” strategy, focusing on selective stock picking, with a preference for IT and banking stocks, while other sectors contribute selectively," said Religare Broking's Ajit Mishra.

Published on Dec 15, 2024, 09:26:00 AM IST

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