The Indian stock market closed the week on a positive note, with benchmarks edging higher after the Reserve Bank of India announced a 25-bps repo rate
cut and revealed plans to inject Rs 1.45 lakh crore through bond purchases and dollar–rupee swaps. Friday’s session on December 5 marked the second straight day of gains, reflecting improved risk appetite after a volatile start to the week. The Sensex climbed 447 points (0.52 per cent) to end at 85,712.37, while the Nifty 50 added 153 points (0.59 per cent) to settle at 26,186.45. Among the broader indices, the BSE Midcap index saw a mild uptick of 0.21 per cent, while the Smallcap index slipped 0.67 per cent. Ajit Mishra, SVP, Research, Religare Broking, summed up the week’s performance, noting, “Markets ended the week on a flat note as early weakness from profit-booking, persistent FII outflows, and a record-low rupee offset the support from strong macro data and the RBI’s 25 bps repo rate cut to 5.25 per cent.” He added that the late recovery on the final trading day helped major indices recover lost ground. How Analysts View the Coming Week On the near-term outlook, Mishra advised a measured stance: “Investors should maintain a balanced approach with a preference for large caps and sectors poised to benefit from the rate cut, particularly financials, autos, and domestic cyclicals.” He also flagged that IT and export-driven companies may continue to draw support from the weaker rupee. Mishra reiterated the importance of selective buying amid currency-led volatility and ahead of the upcoming FOMC meeting. Key Factors That Could Move the Markets One of the most important data points next week will be India’s CPI print on December 12. With October inflation at a historic low of 0.25 per cent, markets will watch closely to gauge the trajectory of price stability, as well as updates on loan growth, deposits, and forex reserves. Alongside domestic cues, geopolitical and international triggers remain strong. India and Russia sealed 16 new agreements during President Vladimir Putin’s visit, spanning defence, economy, culture, healthcare, and media. Putin emphasised Russia’s commitment to energy cooperation, stating, “We are ready to continue uninterrupted shipments of fuel for the fast-growing Indian economy.” Global Signals To Watch: US Fed Decision And Trade Talks All eyes will also be on the US Federal Reserve’s FOMC meeting scheduled for December 9–10. With the CME FedWatch tool assigning an 86.2 per cent probability to another 25-bps cut, the outcome could significantly influence emerging markets. Mishra noted, “Globally, the spotlight will be on the US Federal Reserve’s interest rate decision, which could drive risk sentiment across emerging markets already navigating currency pressures.” India–US trade negotiations will add further complexity. A US delegation led by Rick Switzer is due to arrive in New Delhi to push ahead with a multi-phase trade deal aimed at reducing retaliatory tariffs. Indian Commerce Secretary Rajesh Agrawal commented, “We are optimistic that we will find a solution this calendar year. What needs to come out first is a framework trade deal that can address the reciprocal tariffs.” FII Trends and Market Dynamics Foreign investors have continued their selling streak into December, offloading more than $1 billion within the first four trading days. VK Vijayakumar of Geojit Investments explained this trend, stating, “FIIs are selling primarily due to the sharp depreciation of the rupee by around 5 per cent this year.” He added that DIIs have been active buyers, supported by strong inflows and confidence in economic growth. Gold and Technical Outlook Gold prices responded strongly to expectations of a US rate cut, with spot gold gaining 1 per cent to $4,212.16 per ounce. In India, prices surged by Rs 1,300 to reach Rs 1,32,900 per 10 grams. Jateen Trivedi of LKP Securities noted, “Gold continues to hold strong support at $4,180, while resistance is placed near $4,255.” On technical charts, Mishra indicated that the Nifty is showing resilience: “This validates the ongoing positive structure, and we expect the uptrend to extend towards 26,300–26,500 in the near term.” On Bank Nifty, he added that a move above 60,500 could open the way towards the 61,800 zone.
