What does November month's market movement suggest for December?

Reality, Consumer Durables and Auto were the biggest losers in the month of November, and sectors such as Metals, Telecoms and Power were amongst the ones that closed in positive territory.

The Sensex fell by almost 4.56 per cent in the month of November owing to demonetisation development. Mid-cap and small-cap stocks registered greater decline in the month of November with indices falling as much as 8.32 per cent for small cap stocks and 6.68 per cent for mid-cap stocks.

This downfall has pushed market gains to 3.57 per cent on YTD basis whereas the S&P BSE Mid Cap Index has registered gains of 13.5 per cent for similar period.

FIIs were net sellers in November even as Indian rupee depreciated by 2.4 per cent during the month of August against the USD.

Taking cues from November month, it is clear that demonetisation effects and lack of availability of new notes will impact the companys' operations negatively along with banks in December as well.

Rupee depreciation coupled with rising crude oil prices could be the highlight for coming days as was the case in November month.

The sectoral trend may continue in the month of December with sectors like Metals and Power expected to consolidate gains. Weaker sectors like Reality and Consumer Durables may continue with the weakness.

On the global front with the US GDP on an upswing, it is almost certain that the US central bank will increase interest rates in December. There may be a selloff in global markets, especially in emerging markets including India.

Investors may well hedge their position for volatile days ahead in the market.