The Indian stock market navigated a range-bound week, setting the stage for potential breakouts, buoyed by a surprise monetary policy move from the Reserve Bank of India. While the benchmark indices ended flat—the Nifty 50 dipped 0.06% and the Sensex edged up 0.01%—the broader market saw midcap stocks underperform, declining 1.2%.
RBI's Surprise Move and Market Outlook
In a move that caught many off guard, the RBI announced a 25 basis points repo rate cut to 5.25%. This decision, the third reduction in 2025, defied widespread expectations of a pause given record-low Consumer Price Index inflation at 2% and robust economic growth, with the central bank upgrading its FY26 GDP forecast to 7.3%.
According to Mehul Kothari, Deputy Vice President of Technical Research at Anand Rathi, the market bias remains positive as long as the Nifty 50 holds above the crucial support band of 26,000 to 25,800. "The Indian equity market ended the week ending December 5, 2025 on a positive note," Kothari noted, highlighting that the Nifty closed at 26,192, trimming the weekly loss to a mild 0.2%.
The rate cut ignited sharp rallies in sensitive sectors like banking, auto, realty, and NBFCs. Stocks such as Bajaj Finance, HDFC Bank, Axis Bank, and M&M led the charge. Domestic institutional investors infused ₹8,400 crore to offset foreign institutional investor selling of ₹5,100 crore.
Nifty and Bank Nifty Technical Targets
Kothari believes the Nifty 50's consolidation has solidified the handle of a multi-year cup-and-handle pattern. A decisive close above 26,300–26,350 could confirm a breakout, setting a medium-term target of 28,000–30,000+ by mid-2026. In the near term, a breach of 26,300 could push the index to 26,500–26,700.
On the Bank Nifty, Kothari advises caution. The index faces a formidable hurdle in the 60,500–61,000 zone. "We continue to expect relative underperformance and likely profit-booking once the index tags or marginally exceeds 61,000," he stated, with immediate support placed at 58,500–58,000.
3 Stock Recommendations Under ₹200
For investors looking for opportunities in the affordable segment, Mehul Kothari of Anand Rathi recommended three stocks to buy, all priced under ₹200.
Indian Oil Corporation (IOC): Kothari suggests buying around ₹163 for a target of ₹170, with a stop loss set at ₹159.
Tata Steel: The recommendation is to buy around ₹167, aiming for a target of ₹176. Investors should maintain a stop loss at ₹163.
Lemon Tree Hotels: This hospitality stock is a buy around ₹165 with a target of ₹175. The advised stop loss level is ₹159.
Disclaimer: The views and recommendations are those of the individual analyst. Investors are advised to consult certified experts before making any investment decisions.
