Stock market news: The Indian stock markets have returned to a flat movement following the positive rally observed last weekend, with domestic indices starting slightly lower on Monday.
Investors are taking a cautious stance in anticipation of the US Federal Reserve meeting set for December 9-10.
Market participants are closely monitoring global monetary trends, tariff clarifications, and geopolitical events that might influence investor sentiment as the year draws to a close.
The Nifty 50 index commenced at 26,159.80, reflecting a decline of -26.65 points or (-0.10%), while the BSE Sensex opened the session at 85,624.84, down by -87.53 points or -0.10%.
The Indian stock market rose on Friday following the Reserve Bank of India’s (RBI) decision to lower the policy repo rate by 25 basis points to 5.25%, with the outcome of the MPC acting as the primary driver for the market’s recovery.
By the end of today’s trading session, the Sensex closed at 85,712.37, gaining 447.05 points or 0.52%, while the reached 26,186.45, up by 152.7 points or 0.59%.
In the weekly review, the BSE index recorded a slight increase of 5.7 points, whereas the Nifty 50 lost 16.5 points.
Reduced interest rates lower the cost of borrowing, stimulating loan demand and decreasing funding expenses, which benefits both banks and non-bank lenders.
More affordable loans also enhance the ability to purchase vehicles and homes. The RBI’s decision to cut rates, along with a potential rate cut in the US the following week, could spark a temporary rebound in the market, contributing to what analysts refer to as a Santa Claus rally.
Market Outlook by Dharmesh Shah, Vice President, ICICI Securities
- Index extended consolidation in the vicinity of All Time High over third consecutive week and settled the week on a flat note at 26,186 as deprecating rupee weighed on the market sentiment.
- Broader markets notably lagged, with Midcaps down 0.80% and Smallcaps slipping 2%. Sectorally, beaten-down IT stocks roared back by gaining >3% coupled with traction in auto and metal stocks while PSU banks took a much-needed breather. Consequently, weekly price action formed a small bear candle with lower shadow, highlighting elevated buying demand.
- The elevated buying demand from 20 days EMA coincided with 10 weeks rising trend line is reaffirming the market’s underlying strength that would pave the way to challenge All Time High of 26,300. RBI’s dovish stance boosted market sentiment that helped index to recoup intra-week losses amid depreciating rupee. A decisive breakout above 26,300 could recharge the rally and set the stage for 26,800 in the coming weeks.
- The lack of follow through strength above 26300 would result into prolonged consolidation in 26,300-25,700 range amid elevated volatility ahead of upcoming Fed policy and inflation print. Hence, dips should be utilized to accumulate quality stocks as key support is placed at 25,700 as it is 61.8% retracement of Nov-Dec rally (25,318-26,325) coincided with 50 days EMA.
- Mirroring the benchmark move, Nifty midcap index has been consolidating after clocking a fresh All Time High. The ratio chart of Nifty Midcap vs Nifty 500 has formed a cup & handle pattern. Breakout would confirm outperformance of midcap stocks with Nifty 500 universe in the coming weeks.
- On the sectoral front, rate sensitives sectors like Banking, Auto, Realty would be in focus tracking dovish RBI policy outcome meanwhile IT, Pharma, Oil & Gas would regain upward momentum.
Key monitorable for upcoming week:
- US–India Trade Talks: A visiting US trade delegation may unlock breakthroughs. A positive outcome could boost market sentiment and possibly bring FIIs back
- Fed Rate Decision
- India CPI Print
- US Dollar Index: Breakdown from 10 weeks rising channel confirms resumption of decline in US Dollar index. Follow through weakness bodes well for emerging markets
- Rupee Watch: Indian Rupee is approaching upper band of 7 years rising channel, indicating impending trend reversal which would help to revive the market sentiment
Stocks To Buy This Week – Dharmesh Shah
Dharmesh Shah of ICICI Securities recommends buying .
Buy Larsen & Toubro shares in the range of ₹3,980-4,050. He has Larsen & Toubro share price target of ₹4,520 with a stop loss of ₹3,798.
Disclaimer: The Research Analyst or his relatives or I-Sec do not have actual/beneficial ownership of 1% or more securities of the subject company, at the end of 5/11/2025 or have no other financial interest and do not have any material conflict of interest.
The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and individual circumstances may vary.