Indian Markets Pause Ahead of Crucial GDP Data
The Indian stock market exhibited cautious trading on Friday, closing largely unchanged as investors adopted a wait-and-watch approach ahead of the crucial Q2 FY26 GDP data release. Both benchmark indices, the Nifty 50 and Sensex, opened flat and traded sideways throughout the session, reflecting the market's hesitation at record high levels.
Market Performance and Key Levels
The Nifty 50 concluded the trading day at 26,203 points, while the Sensex settled at 85,707 points. This flat closing comes after a week where the Nifty 50 managed to gain 0.6%, reaching fresh all-time highs after 14 months. The midcap segment outperformed the benchmark with a solid 1.3% gain, while smallcaps ended the week on a flat note.
According to Dharmesh Shah, Vice President at ICICI Securities, the index has maintained its higher high-low formation for the third consecutive week. "The weekly price action formed a bull candle with lower shadow, reflecting buying demand from 20 days EMA," Shah noted in his market outlook.
Sectoral Performance and Expert Outlook
Sectoral performance showed clear winners and laggards during the week. Pharmaceutical, metal, and NBFC sectors remained in the spotlight, attracting significant investor interest. Meanwhile, defense and oil & gas sectors underperformed, failing to keep pace with the broader market movement.
Shah maintains a positive bias on the market, expecting the index to sustain above the 26,300 mark, which could pave the way toward 26,800 in the coming month. He identifies 25,600 as a strong support level, representing the 61.8% retracement of the September-October rally that took the index from 24,588 to 26,104.
Several factors support this optimistic stance:
- The Nifty 500, representing 90% of market capitalization, trades just 2.5% below its peak, suggesting potential catch-up activity
- Indian markets have shown relative outperformance compared to global peers
- Historical December seasonality favors bulls with approximately 70% success rate
Key Factors Influencing Market Sentiment
Investors are closely monitoring several critical developments that could shape market direction in the coming weeks. The anticipation of a US-India trade deal continues to buoy sentiment, with a favorable outcome expected to accelerate positive momentum and attract renewed foreign institutional investment.
Other important monitorables include:
- Upcoming RBI policy decisions
- Monthly auto sales data
- Brent crude oil prices, expected to decline toward $75-58 range
- Indian rupee movement, currently trading around 89.40 against the US dollar
Stock Recommendations from Experts
Dharmesh Shah of ICICI Securities has identified two stocks for potential investment this week. For Adani Ports and Special Economic Zone Ltd, he recommends buying in the range of ₹1,466-1,516 with a price target of ₹1,675 and stop loss at ₹1,377. For Bharat Electronics Ltd (BEL), he suggests purchasing between ₹405-415 with a target of ₹466 and stop loss at ₹385.
As markets await the GDP data release, experts advise investors to use any market dips as buying opportunities in quality stocks backed by strong Q2 earnings performance.
