D-Street may witness action-packed day: New peak margin rules of SEBI kicks in today; auto sales to be in focus

Indian markets witnessed a fabulous run in the month of November. Nifty had advanced 11.39 per cent, while the broader markets had outperformed Nifty by logging gains of 15.52 per cent (Nifty Mid-cap) and 12.96 per cent (Nifty Small-cap).

As we enter into the last month of the mysterious year 2020, bulls show an upper hand; however, their pace is slowing down as they seem exhausted and this could be witnessed with the formation of a Doji pattern on the weekly chart. SGX Nifty is also indicating the same; it indicates that Nifty may open with minuscule gains of 4 points at 12,997 levels.

Despite a flat opening, the day is likely to see a lot of action as the market participants would first react to the GDP numbers, which were released post-market on Friday. Even though the GDP has contracted 7.5 per cent, it has surprised everyone as the pace of contraction has diminished significantly.

The GDP has contracted a massive 23.9 per cent in the first quarter and expectations were that it would contract further by 10 per cent in Q2. Further, the market participants would also keep an eye on the auto sales number, which would start to tickle in. And, most importantly, the new peak margin rules would also come into effect from today (December 1). It is believed that with new peak margin rules coming into effect, the volume would shrink. One of the biggest factors that many traders blew their accounts with is, excessive leverage with the new rules being implemented, which may hamper the volumes but would save traders from blowing up their accounts.

Asian markets have kicked off the month of December on a jubilant note as it shrugged negative cues overnight from Wall Street. Japan’s Nikkei 225 jumped 1.44 per cent to 26,813 levels. Hong Kong’s Hang Seng has advanced 0.61 per cent and China’s Shanghai Composite gained 0.25 per cent to touch the milestone mark of 3,400.

Indian markets ended Friday’s session with a modest decline with Nifty and Sensex shedding 0.14 per cent and 0.25 per cent, respectively. Meanwhile, the broader markets outperformed the benchmark indices as Nifty Mid-cap and Small-cap jumped 2.70 per cent and 3.07 per cent, respectively. On the sectoral front, barring Nifty IT, all other indices ended in green wherein, Nifty Realty, followed by Nifty Media and Nifty Auto emerged as the top gainers.   

US stocks wind-up the month of November on a negative note with Dow declining 0.9 per cent, S&P 500 slipping 0.5 per cent and Nasdaq dipped 0.1 per cent. Despite this, Dow posted its best one-month performance in decades and S&P 500 had its best month since April 2020. The news of Moderna vaccine is effective against severe COVID-19 and seeks clearance, which was outplayed by grim economic data as the pending homes sales in the US unexpectedly decreased in the month of October and November Dallas Fed Manufacturing Index declined more than expected. European indices too ended the session lower.