The market will initially respond to the monthly auto sales data on Monday, followed by the GDP decline to a multi-quarter low of 5.4 percent in Q2FY25. The market is anticipated to be rangebound overall with a favorable bias.The market increased by about 1% for the week ending November 29, extending the upward trend for a further week and indicating optimism following recent stabilization and correction. Market sentiment was improved by easing geopolitical tensions, the expectation that government spending would increase, and the recovery of corporate profitability in the second half of FY25. The sentiment was further reinforced by the BJP-led alliance's resounding victory in the Maharashtra elections, the decline in oil prices, and the rebalancing of the MSCI.
The market will initially respond on Monday to the monthly auto sales data, which began to be released on Sunday, and the decline in GDP to a multi-quarter low of 5.4 percent in Q2FY25. While the attention will be on the RBI policy, US jobs data, Manufacturing & Services PMI numbers, geopolitical developments, and FII activity, the market is anticipated to be rangebound overall with a positive bias, according to experts.
The Nifty 50 went up 0.94 percent to 24,131, and the BSE Sensex went up 0.87 percent to 79,803 over the week. Meanwhile, the broader markets beat the benchmark indices, with the Nifty Midcap 100 index rising 2.5 percent and the Smallcap 100 index rallying 5 percent.
According to Vinod Nair, Head of Research at Geojit Financial Services, "investors will be more inclined to act on the upcoming RBI monetary policy, while market stability will depend on the steadiness of the incoming economic data next week."
He asserts that further economic indicators, such as manufacturing and service PMI data, auto sales, and US job statistics, would draw the attention of investors and so influence the market momentum.
Here are 10 important things to keep an eye on:
Monetary Policy of the RBI
The final Monetary Policy Committee meeting of the current year, which is set for December 4-6, will be the focus of attention next week. Although GDP slowed in the September quarter, most analysts do not anticipate a change in the repo rate because inflation increased significantly beyond the RBI's 4 percent target, reaching 6.21 percent in October compared to 5.49 percent in September due to rising food prices. They say the interest rate decrease could begin at the policy meeting in February or April. Overall, the important to keep an eye on is the commentary regarding the central bank's growth forecast and the timing for the start of the rate-cut cycle.
Worldwide Economic Information
Investors will pay attention to the unemployment rate, JOLTs job openings and quits, and non-farm payrolls from the United States in order to assist the Federal Reserve in making future interest rate decisions, in addition to monthly factory orders and vehicle sales statistics. In addition, a number of Federal Reserve officials' remarks over the course of the next week, including those of Chair Jerome Powell, will be attentively watched in order to glean a clue as to the interest rate decision at the next policy meeting on December 19, particularly following the two previous meetings' 75 basis point cut.
In addition, the final Manufacturing and Services PMI figures for November from the US, Europe, China, and Japan will be monitored.
As the Indian equities markets benefited from last week's steep decline in oil prices due to expectations of a calming Middle East, attention will also be on the commodity. India is a net importer of oil, and any decline in oil prices often increases the number of Indian corporations functioning in the upcoming quarters. The global benchmark for oil, Brent crude futures, fell 3.82 percent during the course of the week to $72.3 a barrel, trading below all significant moving averages, which is encouraging. The International Energy Agency's prediction of excess supply in 2025 also had an impact on oil prices. In the upcoming week, analysts anticipate that prices will continue to fluctuate with a pessimistic leaning.
Data on the Domestic Economy
Participants in the home market will pay particular attention to the HSBC Manufacturing PMI final figures for November, which are scheduled on December 2, and the HSBC Services PMI data, which is due on December 4. Preliminary estimates show that the Manufacturing PMI decreased from the final print of 57.5 in October to 57.3 in November, while the Services PMI rose from the final figure of 58.5 in October to 59.2.
On December 6, the foreign exchange reserves for the week ending November 29 will be made public.
Participants will also be closely monitoring the FII activity because, despite a resurgence of buying interest in the first few days of the week, foreign institutional investors ended the week as net sellers of shares valued at over Rs 5,000 crore because of strong selling in the final two sessions, albeit less than the selling pressure observed in a number of prior weeks. Compared to October's sales of Rs 1.14 lakh crore, the cash segment's October sales of Rs 45,974 crore were significantly lower. Only if the market continues to fall and the valuations become more appealing do experts anticipate that the FIIs will become net buyers.
Nonetheless, emerging economies like India benefited from the fall in the US dollar index and the 10-year Treasury yield. In the same time frame, US bond yields decreased from 4.43 percent to 4.18 percent, while the US dollar index fell from 107.55 to 105.78 on a weekly basis.
IPO
at only three public issues set to start, including Property Share Investment Trust's (REIT) Rs 353-crore IPO in the mainboard segment on December 2 at a price range of Rs 10-10.5 lakh per unit, the primary market may experience a slight slowdown in the launch of initial public offerings (IPOs) next week. Subscriptions for the Emerald Tyre Manufacturers issue will begin on December 5 with a price range of Rs 90-95 per share, while the other two are from the SME segment. Nisus Finance Services Co.'s Rs 114-crore public offer will open on December 4 with a price range of Rs 170-180 per share.
In the SME segment, the IPOs for Agarwal Toughened Glass India and Ganesh Infraworld are set to close on December 2 and 3, respectively, while Rajesh Power Services will list on the BSE SME platform on December 2. Suraksha Diagnostic's book-built issue in the mainboard segment is scheduled to close on December 3 and list on the bourses on December 6. On December 3, Rajputana Biodiesel will debut on the NSE Emerge. On December 4, Abha Power and Steel and Apex Ecotech will follow, followed by Ganesh Infraworld on December 6 and Agarwal Toughened Glass India on December 5.
Technical Perspective
On the weekly charts, the Nifty 50 displayed a bearish candlestick pattern with a long lower shadow and a modest upper shadow, suggesting purchasing activity at lower levels. Technically, the Nifty 50 remained comfortably above the 50-week EMA (Exponential Moving Average - 23,250). The index continued to trade in the lower Bollinger band, which is a bad indicator, but it was unable to close above the 10- to 20-week EMAs that it tested. While the solid support is located in the 23,250–23,300 zone, the index must surpass and maintain above 24,700 in order to enter the upper band of the Bollinger Bands for a significant upward rise. Experts predict that it will encounter resistance at 24,350 in the short term, followed by 24,550, while support is anticipated at 23,900.
F&O Signals
On the call side, the 25,000 strike had the highest open interest, followed by the 24,500 and 25,500 strikes. The 25,000 strike also saw the highest writing, followed by the 25,500 and 24,700 strikes. The put side's biggest open interest is at the 23,500 strike, which is followed by the 24,000 and 23,800 strikes. The 24,000 strike has the highest writing, followed by the 23,800 and 24,100 strikes.
India VIX
After a few days on an upward trajectory, the volatility subsided, providing bulls with some respite. The bulls might feel more at ease if it drops any lower. The fear measure, the India VIX, fell 10.4% to 14.43, below the 15-point line.
In the SME segment, the IPOs for Agarwal Toughened Glass India and Ganesh Infraworld are set to close on December 2 and 3, respectively, while Rajesh Power Services will list on the BSE SME platform on December 2. Suraksha Diagnostic's book-built issue in the mainboard segment is scheduled to close on December 3 and list on the bourses on December 6. On December 3, Rajputana Biodiesel will debut on the NSE Emerge. On December 4, Abha Power and Steel and Apex Ecotech will follow, followed by Ganesh Infraworld on December 6 and Agarwal Toughened Glass India on December 5.
Technical Perspective
On the weekly charts, the Nifty 50 displayed a bearish candlestick pattern with a long lower shadow and a modest upper shadow, suggesting purchasing activity at lower levels. Technically, the Nifty 50 remained comfortably above the 50-week EMA (Exponential Moving Average - 23,250). The index continued to trade in the lower Bollinger band, which is a bad indicator, but it was unable to close above the 10- to 20-week EMAs that it tested. While the solid support is located in the 23,250–23,300 zone, the index must surpass and maintain above 24,700 in order to enter the upper band of the Bollinger Bands for a significant upward rise. Experts predict that it will encounter resistance at 24,350 in the short term, followed by 24,550, while support is anticipated at 23,900.
F&O Signals
On the call side, the 25,000 strike had the highest open interest, followed by the 24,500 and 25,500 strikes. The 25,000 strike also saw the highest writing, followed by the 25,500 and 24,700 strikes. The put side's biggest open interest is at the 23,500 strike, which is followed by the 24,000 and 23,800 strikes. The 24,000 strike has the highest writing, followed by the 23,800 and 24,100 strikes.
India VIX
After a few days on an upward trajectory, the volatility subsided, providing bulls with some respite. The bulls might feel more at ease if it drops any lower. The fear measure, the India VIX, fell 10.4% to 14.43, below the 15-point line.
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