India's key equity indices, the Sensex and the Nifty 50, managed to break a four-day losing streak on Thursday, December 4, closing with modest gains. However, the broader market sentiment remained subdued, with mid-cap and small-cap indices ending the session in negative territory.
Market Performance and Key Drivers
The S&P BSE Sensex closed at 85,265.32, gaining 159 points or 0.19%. The Nifty 50 settled at 26,033.75, rising 48 points or 0.18%. In contrast, the BSE Midcap index declined by 0.19%, and the Smallcap index fell by 0.32%.
Market analysts attributed the cautious and mixed performance to several factors. The persistent weakness in the Indian rupee, continued outflow of foreign capital, and investor wariness ahead of the Reserve Bank of India's Monetary Policy Committee (RBI MPC) outcome all contributed to the restrained trading activity. Mixed signals from global markets also failed to provide a decisive direction.
Expert Analysis and Outlook
"Weakness in the rupee continues to pressure sentiment, coupled with caution ahead of the MPC policy outcome," said Ajit Mishra, Senior Vice President of Research at Religare Broking Ltd.. He added that while a 25 basis points rate cut is largely anticipated by the market, the committee's commentary will be more critical for determining the market's next directional move.
Mishra noted that despite the volatility, the Nifty 50 is holding above its first support level—the 20-day exponential moving average (DEMA) around 25,950—supported by renewed buying in private banking and IT stocks. However, the mixed performance of heavyweight stocks and the underperformance of small-caps are keeping overall market enthusiasm in check. "We maintain a positive yet cautious outlook, emphasising disciplined stock selection and prudent trade management," he advised.
Stocks to Buy and Sell: Expert Recommendations
Ajit Mishra of Religare Broking has suggested specific trading ideas for the next one to two weeks, recommending two stocks to buy and one to sell.
Aurobindo Pharma: Buy
Mishra recommends a buy on Aurobindo Pharma with a target price of ₹1,320 and a stop loss at ₹1,168. He highlighted the notable resilience in the pharmaceutical sector, with Aurobindo Pharma moving in sync with this strength. The stock has maintained momentum after breaking out from a broader base near its long-term weekly moving average. Recent price action indicates a buying pivot near the 20-day EMA, offering a fresh entry point. "Backed by the steady performance of the pharma space and the stock’s firm price behaviour, the overall outlook remains constructive," Mishra stated.
UPL: Buy
For UPL, Mishra suggests a buy with a target price of ₹810 and a stop loss at ₹730. He pointed out that the stock has been a consistent outperformer, maintaining an upward trend within a rising channel since the start of the year. After a strong rally, it is now in a consolidation phase. This has formed a potential pennant pattern, and the stock is nearing a breakout. "A decisive breakout could trigger a resumption of the primary uptrend... Given this technical setup, further upside is anticipated," he explained.
Bandhan Bank: Sell
Mishra advises selling Bandhan Bank futures, with a target price of ₹138 and a stop loss at ₹151. He observed that the bank's stock remains in a pronounced downtrend, characterized by a pattern of lower highs and lower lows, and continues to trade below the 100-week EMA. A recent consolidation near a previous neckline was followed by a fresh breakdown, reinforcing the bearish momentum. "With the bias firmly negative, the downtrend is likely to extend in the coming sessions," Mishra concluded.
Disclaimer: The views and recommendations expressed are those of the individual analyst. They are for educational purposes only and do not constitute investment advice. Investors are strongly advised to consult with certified experts before making any investment decisions, as market conditions are subject to rapid change.
