Markets likely to open positively on US cues

The benchmark stock indices are likely to open on a positive note on Monday on positive cues from the US markets, but a decisive move from the current levels will depend on fresh buying by foreign institutional investors (FIIs). FIIs have been net sellers of over Rs 12,200 crore in the cash markets this month.

The markets will also keenly watch the rollovers in the futures and options (F&O) segment this week, which is also the expiry week for derivatives contracts, said analysts.

Since there are no major news events slated on the local front, the markets will keep reacting to external news flow, they said.

The Bombay Stock Exchange's (BSE) 30-share index, Sensex, ended its six-day losing streak by closing the week on a positive note on Friday.

During the week, the Sensex moved widely in a range of 18,182-19,971, before closing at 18,853, a net loss of 845.49 points from last week's close of 19,698.

The broader S&P CNX Nifty of the National Stock Exchange (NSE) tumbled 298.25 points, or 5%, to close the week at 5,608 from previous week's close of 5,907. Large caps are expected to see a lot of action on the back of F&O rollover, while mid-caps will remain subdued.

The outstanding open interest in the derivatives segment crossed a record of Rs 1,08,000 crore on November 20. Nasdaq ended 1.34 per cent higher in the US, while the Dow Jones Industrial Average increased 1.4 per cent to 12,981.

Asian markets followed suit with Nikkei, Hang Seng and Strait Times closing with gains last week.

Manish Sonthalia, vice-president, equity strategy, Motilal Oswal said: "We are fairly positive on the markets for next week. Though Nifty is in a decisive zone, we maintain a positive bias. Some meaningful correction has happened, so we think the markets are headed higher from current levels. Twenty thousand should be the resistance for the Sensex, and in the coming week it may move towards 19500 levels."

Late on Friday, Reliance Industries said it sold 4.01 per cent stake in subsidiary Reliance Petroleum for Rs 402 crore through open market sales.

This is likely to bring some pressure on other stand-alone refining companies, such as MRPL and Chennai Petroleum, in terms of valuations, he said. He, however, was bullish on Reliance Industries.

On the F&O rollovers, Sonthalia said, "The rollover is in line with the six months average of 19 per cent. By and large, it has been smooth till now. As carry forward charges are nominal, no hiccups are expected on this front."