The Indian stock market closed largely unchanged, reflecting investor caution ahead of the Reserve Bank of India’s upcoming monetary policy announcement. The benchmark indices, Nifty 50 and Sensex, oscillated within a narrow range, remaining close to key support levels. The Sensex wrapped up the day at 85,106.81, down by 31.46 points, or 0.04%, while the Nifty 50 slipped 46.20 points, or 0.18%, closing at 25,986.
Market analysts pointed to a significant drop in the Indian rupee, which hit an all-time low of ₹90.13 against the US dollar, as a primary contributor to the lackluster trading session. This depreciation stemmed from weak trade inflows, reduced foreign portfolio investments, and ongoing uncertainties regarding a delayed trade agreement between India and the US. The rupee’s decline raised alarms over imported inflation and potential capital outflows, resulting in the Nifty 50 falling below the critical 26,000 mark.
In contrast, gold prices experienced a rebound on December 3, as February futures on the Multi Commodity Exchange (MCX) rose by ₹1,641, or 1.3%, peaking at ₹1,31,400 per 10 grams, the highest in the past six weeks. The primary market remained spirited, with three major IPOs fully subscribed on their first day, indicating continued investor interest amidst the sentiment surrounding central bank policies.
Vinod Nair, Head of Research at Geojit Investments Ltd, noted that Indian equities have stabilized despite the rupee’s record low, although they remain under pressure from foreign institutional investor outflows and prevailing trade uncertainties. He remarked on the decline in industrial activity in November, highlighted by a manufacturing PMI that showed slower new orders, waning export demand, and an increasing trade deficit.
According to Abhinav Tiwari, a Research Analyst at Bonanza, market participants are closely monitoring the RBI’s Monetary Policy Committee meeting. Expectations suggest a possible 25 basis points cut in the repo rate; however, robust GDP data could temper the likelihood of an immediate rate adjustment. Overall, the flat market performance masks deeper underlying weaknesses, with future movements depending heavily on the stabilization of the rupee and clarity in the India-US trade landscape.
As for Thursday’s trade setup, Rupak De, a Senior Technical Analyst at LKP Securities, observed that the Nifty 50 initially fell but found support around 25,900 before rebounding toward the day’s close. Despite this recovery maintaining the index above the 21-day Exponential Moving Average (EMA), a nascent bearish sentiment seems to be emerging, indicated by a bearish divergence on the daily chart and a dip below a rising trendline.
If the index manages to sustain its recovery from the 25,900 support level, it could see an upward move towards 26,060, though it is likely to face resistance there, potentially leading to another downturn.
Market experts have recommended several stocks for intraday trading. Sumeet Bagadia from Choice Broking advises buying Birlasoft Ltd at ₹423 with a stop-loss at ₹408 and a target of ₹453, citing signs of a trend reversal. His analysis emphasizes the stock’s robust recovery after a prolonged downtrend, enhanced by strong volume.
For eClerx Services Ltd, Bagadia suggests a buy at ₹4,911 with a target of ₹5,255, noting a strong breakout from previous consolidation with solid upward momentum across key moving averages.
Ganesh Dongre from Anand Rathi has identified CarTrade Tech Ltd, setting a buy recommendation at ₹3,095 with a target of ₹3,200, stressing the stock’s established support levels and consistent bullish trends. He also recommends NTPC at ₹323 with a target of ₹330 and Punjab National Bank at ₹120 aiming for ₹128, reinforcing their bullish patterns and potential upside.
Shiju Koothupalakkal from Prabhudas Lilladher also has several recommendations for investors, including Avanti Feeds at ₹827.80 targeting ₹870, Bajaj Consumer Care at ₹273.55 aiming for ₹290, and Gujarat Gas at ₹412.90 targeting ₹435.
Market dynamics and external factors such as currency movements and geopolitical developments continue to play crucial roles in shaping investor sentiment and stock performance. As the market prepares for upcoming policy announcements and global economic indicators, continued vigilance is suggested for navigating this landscape.
