Stock market outlook: The markets this week were driven by macroeconomic pressures and mixed global cues. Domestically, the rupee slid to a fresh record low of 90.56 against the US dollar, dampening risk sentiment. However, some relief came after the US Federal Reserve announced a 25-basis-point rate cut, while optimism over progress in India–US trade talks helped cap further downside.Foreign Institutional Investors (FIIs) continued to trim equity exposure, keeping pressure on benchmarks. However, sustained buying by Domestic Institutional Investors (DIIs) provided partial support. For the week, the Nifty50 fell 139.50 points, or 0.53%, to close at 26,046, while the BSE Sensex declined 445 points to settle at 85,268.Markets saw a mild correction, with the Nifty trading in a downward consolidation phase before ending the week in the red.
Key cues to watch the upcoming week
India–US trade talks: Developments on the India–US trade front will remain in focus and could influence both equities and the rupee.Domestic data: The week ahead features key releases, including Wholesale Price Index (WPI) inflation and trade balance data. Flash readings of the HSBC Composite, Manufacturing and Services PMI will also be tracked for early signals on economic momentum.Currency movement: The rupee remains under pressure due to continued FPI outflows from both bonds and equities. Rising global yields and the unwinding of USD and JPY carry trades are adding stress to Indian bonds.“There are, however, incremental positives around the India–US trade deal, which could provide intermittent relief to the rupee. Overall, we expect a broad trading range of 89.50–91.00 on spot,” said Anindya Banerjee, Head Currency and Commodity at Kotak Securities, as reported by ET.FII-DII activity: Earlier on Friday, FIIs were net sellers to the tune of Rs 396.26 crore, while DIIs remained strong buyers with net inflows of Rs 2,828.21 crore.Technical front: The Nifty has reclaimed its key short-term moving average (20 DEMA) near the 25,950 level. Holding above this zone will be crucial to sustain the recovery and could open the path toward the record high of 26,300, with further upside potential up to 26,550.However, caution remains warranted. “Failure to maintain this support could lead to a retest of the previous swing low near 25,700, followed by the major support around 25,400, which coincides with the 100 DEMA,” said Ajit Mishra, SVP, Research at Religare Broking.He advised investors to remain selective, sating that, “participants should stay selective and maintain a balanced approach amid ongoing currency volatility and mixed global cues. Besides, traders should avoid chasing stocks facing negative news flow in anticipation of a rebound and wait for clear signs of stability before taking fresh exposure.”Sector-specific cues: The Auto retail activity stayed steady during the week, with November registrations rising 2% year-on-year across passenger vehicles, three-wheelers, commercial vehicles and tractors. Meanwhile, disclosures on public sector banks writing off Rs 6.15 lakh crore of loans over the past five-and-a-half years kept the financial space in focus.Commenting on Friday’s session, Ajit Mishra, said, “Markets extended their rebound on Friday, gaining over 0.5% on the back of favorable global cues. After a gap-up start, the Nifty saw some early volatility, but steady buying in index heavyweights helped the benchmark close near the day’s high at 26,046.95. All key sectors, barring FMCG, contributed to the up move, with metals, realty, and energy leading the gains. The broader indices moved in tandem, rising nearly 1% each and reflecting improved market breadth.”“The positive momentum was supported by global sentiment, particularly optimism stemming from the Fed’s recent rate-cut stance, which boosted risk appetite across equities. Domestic flows also remained healthy, with sustained retail and mutual fund buying, supported by stable macro indicators and improved liquidity conditions. However, foreign flows were mixed due to currency volatility and ongoing discussions around US–India trade dynamics.“With currency volatility, global cues and key data releases in play, market participants are likely to remain cautious as trading resumes this week.(Disclaimer: Recommendations and views on the stock market, other asset classes or personal finance management tips given by experts are their own. These opinions do not represent the views of The Times of India)
