FII Fears Fade, Domestic Hopes Rise: The Market’s New Script

Updated: December 04, 2025 23:05

Image Source: The Economic Times

Markets await the RBI’s MPC decision, with Nifty consolidating near 26,000 and Bank Nifty facing resistance. A dovish policy could trigger upside, while FII outflows and rupee weakness add caution. Traders should watch key support and resistance levels, sectoral action, and global cues for intraday moves.

As traders gear up for the December 5 session, the spotlight remains firmly on the Reserve Bank of India’s Monetary Policy Committee (MPC) outcome, with expectations of a rate cut fueling cautious optimism. The Nifty 50 is consolidating near the 26,000 mark, showing resilience after snapping a four-day losing streak, while Bank Nifty faces key resistance ahead of the policy announcement. Global cues and persistent FII outflows are also shaping the pre-market sentiment.

Key Highlights:

Nifty 50 Support and Resistance: The index is seen as range-bound between 25,900 and 26,200, with immediate support at 25,950–25,900 and resistance at 26,100–26,150. A decisive break above or below these levels could trigger fresh momentum.
RBI Policy Impact: A dovish policy tone could push Nifty toward 26,300, while a cautious or hawkish stance may drag it below 25,900, opening further downside risks.
Put Options Data: Maximum Put open interest is at the 26,000 strike (99.49 lakh contracts), acting as a key support. Significant Put writing has also been observed at 26,050 and 25,700 strikes.
Bank Nifty Levels: The index finds immediate support at 59,000 and resistance at 59,800. Consolidation is expected in the 58,500–60,100 range ahead of the MPC decision.
Market Recap: Nifty closed above 26,000, with Tata Consultancy Services and SBI Life Insurance leading gains. TCS, Bajaj Finance, Reliance Industries, and others saw positive momentum in early trade.
FII Outflows: Sustained foreign institutional investor selling is capping sharp upside moves, while strong domestic institutional buying provides some stability.
Rupee at Record Low: The Indian rupee breached the 90-mark against the dollar, opening at ₹90.41, adding to currency volatility.
Global Cues: Positive close on Wall Street and mixed Asian markets offer mild support, but the dollar’s strength remains a concern.
Sectoral Action: PSU banks slipped marginally, while select private banks and IT stocks led gains. PowerGrid, Adani Ports, and NTPC were among the early decliners.
Economic Forecasts: Fitch upgraded India’s FY26 growth forecast to 7.4%, citing robust private consumption and improved sentiment.
Technical Patterns: Nifty formed a doji candle, signaling indecision and consolidation ahead of major news flow.
Analyst Views: Experts advise traders to watch for a breakout above 26,200 for further upside of a fall below 25,900 for a deeper correction.
Stock Buzz: Wipro, TCS, and HDFC Bank were top gainers, while Bharat Electronics and Adani Enterprises were among the losers.
Currency & Commodity: Rupee’s weakness and falling crude oil prices are providing mixed signals for equities and the rupee.
Key Events: Focus remains on the RBI policy, US economic data, and global market cues for intraday direction.