The Indian equity markets closed Friday's trading session on a strong positive note, buoyed by a surprise interest rate cut announced by the Reserve Bank of India (RBI). The central bank's Monetary Policy Committee (MPC) decided to reduce the policy repo rate by 25 basis points to 5.25%, a move that immediately lifted investor sentiment and triggered a broad-based rally.
Market Performance and Weekly Snapshot
By the end of the trading day on Friday, the benchmark Sensex had gained 447.05 points or 0.52% to settle at 85,712.37. Similarly, the Nifty 50 index rose by 152.7 points or 0.59% to finish at 26,186.45. The rate cut, which lowers borrowing costs for banks and subsequently for consumers and businesses, was the primary catalyst for the market's upward move. In the broader weekly context, however, the performance was mixed. The BSE index managed a slight gain of 5.7 points, while the Nifty 50 recorded a marginal decline of 16.5 points over the week.
Analysts pointed out that cheaper loans stimulate demand in interest-sensitive sectors like housing and automobiles, while also reducing funding costs for banks and non-banking financial companies (NBFCs). This dynamic improves their profitability outlook. The domestic rate reduction, coupled with expectations of a potential rate cut from the US Federal Reserve in the near future, has set the stage for what market participants are terming a potential 'Santa Claus rally' in the short term.
Key Drivers and Market Outlook for the Coming Week
The market trajectory in the immediate future will be heavily influenced by a mix of domestic and global factors. Domestically, all eyes will be on the Consumer Price Index (CPI) inflation data for India, scheduled for release on December 12. On the global front, the US Federal Reserve's interest rate decision is the key event, as it will impact risk sentiment in emerging markets like India, which are also contending with currency fluctuations.
Investors are also monitoring the Indian rupee, which weakened past the 90-per-dollar mark last week. The focus is now shifting to the upcoming US Federal Open Market Committee (FOMC) meeting scheduled for December 9–10, 2025. Furthermore, the primary market is set to be active, with thirteen new Initial Public Offerings (IPOs) across the mainboard and SME segments slated to launch this week.
Trade Setup and Technical View
Commenting on the technical outlook, Rupak De, Senior Technical Analyst at LKP Securities, noted that the Nifty 50 witnessed a strong surge following the monetary policy announcement. The overall trend remains positive, with the index sustaining above the 21-day Exponential Moving Average (EMA). "On the hourly chart, the index has broken out from its recent consolidation phase, indicating a rise in optimism," De said. The Relative Strength Index (RSI) has also shown a bullish crossover, suggesting strong momentum.
"In the near term, the trend is likely to remain strong, with the Nifty 50 possibly targeting 26,300 or 26,440. Support is established at 26,060–26,000. Engaging in buying during dips may be preferred as long as the index remains above 26,000," De advised.
Stocks to Buy Today: Expert Recommendations
Market experts have recommended six stocks for intraday trading on Monday. The recommendations come from Ganesh Dongre of Anand Rathi and Shiju Koothupalakkal of Prabhudas Lilladher.
Ganesh Dongre's stock picks:
Godrej Properties Ltd: Buy at ₹2,082, stop-loss at ₹2,040, target ₹2,200. Dongre highlighted the stock's strong bullish pattern and solid support base at ₹2,040.
SBI Cards and Payment Services Ltd: Buy at ₹885, stop-loss at ₹860, target ₹920. The analyst noted a continued bullish pattern with support at ₹865.
United Spirits Ltd: Buy at ₹1,455, stop-loss at ₹1,430, target ₹1,500. This stock also shows a bullish pattern with support at ₹1,430.
Shiju Koothupalakkal's intraday picks:
L&T Finance Ltd: Buy at ₹309.60, stop-loss at ₹302, target ₹325. Koothupalakkal cited a strong uptrend and higher bottom formation on the daily chart.
Dredging Corporation of India Ltd: Buy at ₹880, stop-loss at ₹860, target ₹940. The stock shows a flag pattern breakout with improving volume participation.
PNB Housing Finance Ltd: Buy at ₹903.85, stop-loss at ₹880, target ₹950. The stock has moved past its 50-EMA level, indicating improved bias and strength.
Disclaimer: The views and recommendations above are those of individual analysts or broking companies, and not of Mint. Investors are advised to consult certified experts before making any investment decisions.
