Barring a sharp downturn, the Nifty 50 is most likely to end 2022 with returns of around 2 percent. The index has been in consolidation mode for the last two days, and may also arrest a four-week long run of weekly losses.

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Other than it being the last trading day of 2022, today also marks the start of the January F&O series. The Nifty 50 ended the December series with declines of close to 300 points after gaining nearly 1,700 points across October and November.

A last hour recovery on expiry day ensured that the Nifty 50 has closed near the crucial level of 18,200 on the upside. The Nifty Bank index gained over 750 points from the day's low, to end right at the important 43,250 level.

Nilesh Shetty of Quantum Advisors does not expect large underperformance from the Indian market in 2023 compared to other emerging market peers. "I know a lot of large investors who had significant allocation in China, in EMs are very clear, they will not allocate more to China, given the political developments there. The only other emerging market which comes to mind to put more money into right now is India," he told CNBC-TV18 during an interaction on Thursday.

What do the charts suggest for Dalal Street?

Rupak De of LKP Securities expects the Nifty to reclaim the 50-day exponential moving average on the daily chart. He also pointed to the fact that the Relative Strength Index (RSI) is in a bullish cross over. Over the near term, he expects the trend to remain positive as long as the Nifty 50 holds above 17,950. On the upside, he sees resistance at 19,350.

The Nifty Bank crossed the important resistance of 43,000 on Thursday, and any dip should be utilised to create buying opportunities, according to Kunal Shah of LKP Securities. With momentum indicators in the buy zone, Shah expects the index to head higher towards levels of 44,000 - 44,500.

Here are key things to know about the market ahead of the final trading day of 2022:

SGX Nifty

On Friday, Singapore Exchange (SGX) Nifty futures — an early indicator of the Nifty 50 index — gained 61 points or 0.33 percent to 18,341, thereby pointing to a positive opening for the market.

Global Markets

Asian markets have opened higher on the last trading day of the year with the Hang Seng leading the gains by rising nearly 2 percent. The Shanghai Composite and the Shenzen Composite are up over half-a-percent each.

Benchmarks on Wall Street finally saw some relief on Thursday after a sell-off over the last two sessions. The Dow Jones gained 350 points while the Nasdaq added over 2.5 percent in regular trading. Today will also mark the end of the year where the tech-heavy index has shed over 30 percent in value. The S&P 500 is down 20 percent for the year while the Dow Jones is down 10 percent.

What to expect on Dalal Street

Nagaraj Shetti of HDFC Securities observed a long positive candle that formed on the Nifty 50's daily chart, which confirmed the bottom formed at levels of 17,774. The Nifty 50 is now placed on the edge of an upside breakout of 18,200. "Such pattern is likely to have a positive impact on the market ahead," he said, adding that a decisive move above 18,200 can take the Nifty 50 towards levels of 18,500. On the downside, immediate support is placed at 18,080.

Shetty of Quantum Advisors expects India to get a lot more flows due to its positioning in the EM basket. "In an economic upcycle where corporate earnings are rising and flows remain strong domestic as well as international I would be very surprised if Indian markets do not give decent returns," he said.

Key levels to watch out for

For the first expiry of the new year, which will take place on January 5, the 18,200 call Strike of the Nifty 50 index added 18.5 lakh shares in Open interest, followed by the 18,300 call, which added another 8.2 lakh shares.

On the Downside, the 18,000 put added over 30 lakh shares in Open Interest, followed by the 18,200 put, which added 14.7 lakh shares. The 18,100 put also added close to 13 lakh shares.

The last three January F&O series have not been kind to the Nifty 50, with the index declining anywhere between 0.5 percent to 1.2 percent. It begins the series at 79 percent rollovers, in-line with its three-month average at the same level. However, it begins the series with 1.05 crore shares in Open Interest, which is the lowest since September.

FII/DII activity

Long build-up (Increase in price and Open Interest)

Short build-up (Decrease in price and Increase in Open Interest)

First Published:Dec 30, 2022 5:18 AM IST