Week Ahead: Auto sales, RBI Policy, FII outflow, global cues among key market triggers for Sensex, Nifty 50 | Stock Market News

The Indian stock market extended its gains for the second consecutive week amid volatility, initially driven by robust investor sentiment and renewed buying following the decisive victory of the BJP-led NDA in the Maharashtra assembly elections—a state of significant economic importance.

In the first week of December, investors will closely monitor key market triggers, including the Monetary Policy Committee (MPC) meeting by the Reserve Bank of India (RBI), monthly auto sales, foreign fund outflows, Russia-Ukraine geopolitical tensions, US bond yields, the US dollar, crude oil prices, global cues, and domestic and global macroeconomic data.

Also Read: Stock market crash: Prabhudas Lilladher cuts Nifty 50 year-end target to 27,381, recommends ‘buy on dips’ for long term

The week started optimistically following the outcome of the Maharashtra elections, with the Nifty hitting a high of 24,350. However, the euphoria was short-lived due to month-end foreign fund outflows on derivatives expiry and fluctuations in heavyweight stocks limited the upside.

In the previous session, domestic benchmark indices Sensex and Nifty 50 jumped nearly one per cent. They recouped a large chunk of their losses from Thursday’s session of month-end expiry and ended the week higher, helped by gains in heavyweight Reliance Industries and drugmakers.

The NSE Nifty 50 rose 0.91 per cent to 24,131.1, while the BSE Sensex gained 0.96 per cent to 79,802.79. The benchmarks slid nearly 1.5 per cent each in the prior session, but the day’s gains ensured they ended the week with about one per cent higher. The broader smallcap and midcap indexes logged weekly gains of five per cent and 2.5 per cent, outpacing the benchmarks.

“Although the markets experienced some volatility during the week due to lingering geopolitical tensions, bargain buying in value stocks at lower levels ultimately propelled the indices into positive territory,” said Palka Arora Chopra, Director of Master Capital Services Ltd.

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“Banking stocks played a pivotal role, with index heavyweight HDFC Bank reaching a fresh all-time high. Foreign outflows slowed, reflecting growing optimism about increased government spending following the BJP electoral victory. However, geopolitical risks persisted as Russia launched new missile strikes on Ukraine and violated a ceasefire agreement between Israel and Lebanon,” added Chopra.

On the weekly front, the BSE benchmark jumped 685.68 points or 0.86 per cent, and the Nifty climbed 223.85 points or 0.93 per cent. The market slipped into correction territory — a 10 per cent drop from its record high — earlier in the month, on concerns over dull corporate earnings and persistent foreign outflows.

Also Read: India’s GDP growth: The first half faltered, but economy seen rebounding in the second

This month, the Nifty has shed about 0.3 per cent, weighed down by the plunge in the two Adani Group stocks on the index. In contrast, the Sensex, which has no Adani stocks, rose about 0.5 per cent in November. The small and midcaps logged marginal gains.

“The market saw some relief after consolidation, aided by the ease in geopolitical tensions, expectations of stability in government spending in H2FY25 and MSCI rebalancing. The rally was broad-based, while capex-linked sectors like infra, capital goods, and industrials outperformed in expectation of a surge in new order inflows,” said Vinod Nair, Head of Research, Geojit Financial Services.

“We expect the prospects of H2 earnings to remain positive due to a good monsoon, festival and marriage season, which could ease the impact of earnings downgrades that happened in Q2,” added Nair.

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Looking ahead, markets will likely react to the shocking Q2 GDP growth of 5.4 per cent. High-frequency indicators such as auto and cement sales and HSBC Manufacturing and Services PMI data are expected to provide further market direction.

This week, the primary market will witness action as some new initial public offerings (IPO) and important listings are slated across the mainboard and small and medium enterprises (SME) segments. The week will be critical from the domestic and technical point of view as investors will track domestic developments, global markets and macroeconomic data.

Here are the key triggers for stock markets in the coming week:

RBI MPC Meeting

The central bank’s rate-setting monetary policy panel will begin deliberations for the fifth policy verdict for FY25 this week. Headed by RBI Governor Shaktikanta Das, the six-member MPC will meet for three days—from December 4 to 6—and announce its decision on December 6 at 10 a.m.

Also Read: India’s forex reserves hit 5-month low of $656 billion, drop by $47 billion in 7 weeks; Rupee crashes to 8-month low

The RBI has kept the repo rate unchanged at 6.5 per cent since February 2023. Market volatility may persist in the run-up to the MPC decision, and rate-sensitive banking stocks will be in focus throughout the week.

“The market is likely to witness some repercussions from the fall in Q2 FY25 GDP to 5.4 per cent. On the other hand, investors will be more inclined to act on the upcoming RBI monetary policy. Though the consensus shows status quo, the probability of a rate cut in February is high due to the subdued growth in Q2,” said Vinod Nair of Geojit.

Also Read: India’s April-October fiscal deficit narrows to ₹7.51 trillion, driven by RBI dividend and lower capex

D-Street analysts and economists expect the central bank to maintain its current stance to bring India’s inflation near its target level, even though the US Federal Reserve has delivered two interest rate cuts in 2024. However, analysts say any indication of a future rate cut in commentary could lift market sentiment amid global volatility. 

“Much of the slowdown appears to be priced in, and the weak data may compel the Reserve Bank of India (RBI) to consider rate cuts sooner than expected. The upcoming RBI policy on December 6 will be crucial, with the interest rate decision and commentary being key focus areas,” said Santosh Meena, Head of Research, Swastika Investmart Ltd.

3 new IPOs, 8 listings to hit D-Street

In the mainboard segment, Property Share REIT IPO will open for subscription on December 2, while Suraksha Diagnostic IPO will close for bidding on December 3. In the SME segment, two new SME IPOs will open for subscription this week.

Shares of Suraksha Diagnostic will debut on the BSE and NSE stock exchanges, and shares of seven SME IPOs will be listed either on BSE SME or NSE SME this week. Also Read: Suraksha Diagnostics IPO: What does GMP signal after day 1 of bidding? Subscription status, review; should you apply?

FII Activity

Foreign institutional investors (FIIs) were net sellers this week, selling equities worth ₹5,026.77 crore, while domestic institutional investors (DII) bought equities worth ₹6,924.78 crore. FIIs sold heavily, offloading ₹12,000 crore on the expiry day.

“FIIs continued their selling spree in November. A perplexing feature of the recent FII activity is their highly erratic nature. In the three days from 23rd through 25th November, FIIs were buyers. But in the next two days, FIIs again turned massive sellers, having sold equity for ₹16,139 crore,” said Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

FII selling in November is lower than that of October. In October, the total FII sold through stock exchanges was ₹1,13,858 crore. In November, this had come down to ₹39,315 crore. This can be partly attributed to the reduced valuations caused by the correction in the market.

Also Read: FII selling crosses ₹2 trillion in FY25, may cross FY22 record

“The trend of FII buying through the primary market continues. In November, FIIs bought stocks for ₹17,704 crore through the primary market. If we take the period up to November 29th 2024, the total FII selling for the year stands at ₹1,18,620 crore,” said Dr. V K Vijayakumar.

“During this period, FIIs bought equity for ₹1,03,601 crore through the primary market. This dichotomy is due to the high valuations in the secondary market and the reasonable valuations in the primary market. It appears that FIIs will likely turn out consistent buyers only when the market corrects further and valuations become attractive,” he added.

Global Cues

On the global front, geopolitical tensions, particularly the Russia-Ukraine situation, remain a concern, especially for markets and crude oil prices. However, the recent cooling of the US dollar index and US bond yields is generally favourable for emerging markets like India. 

Also Read: US Q3 GDP data: US economy grows 2.8% YoY in third quarter on steady consumer spending

D-Street analysts say investors also turned to US and Eurozone inflation indicators, which will influence central banks’ December policy rates. Important macroeconomic data, such as Manufacturing PMI from the US and China, US job data, and US Fed Chair Jerome Powell’s speech, will influence market sentiment. 

Hence, the market’s outlook will be guided by major global economic data, such as the US S&P Global Composite PMI (Nov), the US Manufacturing PMI (Nov), the US ISM Non-Manufacturing PMI (Nov), the US Services PMI (Nov), the US JOLTS Job Openings (Oct), the US Nonfarm Payrolls (Nov), the US Initial Jobless Claims, and the US Unemployment Rate (Nov).

Oil Prices

International crude oil prices edged lower in the previous session logging a weekly decline of more than three per cent, pressured by easing concern over supply risks from the Israel-Hezbollah conflict and the prospect of increased supply in 2025 even as the Organisation of Petroleum Exporting Countries and its allies (OPEC+) is expected to extend output cuts. 

Brent crude fell 34 cents, or 0.46 per cent, to settle at $72.94 per barrel. US West Texas Intermediate (WTI) crude futures fell 72 cents, or 1.05 per cent, to settle at $68, from the last close before Thursday’s Thanksgiving holiday. 

For the week, Brent shed 3.1 per cent, while WTI lost 4.8 per cent. Trading activity was muted because of the US public holiday. Back home, crude oil futures settled 0.56 per cent lower at ₹5,811 per barrel on the multi-commodity exchange (MCX).

Corporate Action

Shares of some companies will trade ex-dividend in the coming, while Wipro will trade ex-bonus. Check full list here

Technical View

On the technical front, Nifty faces stiff resistance near 24,350, which coincides with the 100 DEMA. “A decisive break above this level is needed for a directional move. Until then, consolidation within the 23,550-24,350 range is likely, with the 23,550-23,800 zone acting as a strong support,” said Ajit Mishra of Religare Broking.

Given their influence and relatively stable performance, IT and banking will be key in shaping market direction. While other sectors are still in the early recovery stages, stock-specific opportunities are emerging across the board. Traders are advised to focus on identifying stocks with strong relative strength and adopt a selective approach to capitalize on these opportunities.

Santosh Meena of Swastika Investmart believes Nifty is positioned above its 20-DMA and 200-DMA but faces an immediate resistance zone between 24,350 and 24,415. A breakout above this level could push it towards 24,625–24,770. On the downside, 23,850 is the first support, followed by a major zone at 23,650–23,500. 

According to Palka Arora Chopra of Master Capital Services, the current trend suggests a “buy on dips” approach, with key levels guiding traders’ entry and exit. Maintaining support above 23,800 is critical to sustaining the bullish momentum.

“Bank Nifty closed positive for the second consecutive week, gaining 1.80 per cent, and formed a spinning top candle on the weekly chart. The index respects the 51,750–51,850 support zone, suggesting a “buy on dips” approach until trading above this level,” said Chopra.

A breach below could lead to a sharp fall toward 51,100. On the upside, 52,400 acts as resistance; crossing this level could drive the index to 53,000. Maintaining support above 51,750 is critical to sustain bullish momentum, with traders eyeing key levels for directional cues.

Disclaimer: 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.