RBI MPC Result, FIIs Fluctuate Among 8 Factors To Impact Stock Markets This Week

Equity benchmarks extended their winning streak for a third straight week, scaling new all-time highs on improving global risk appetite and supportive domestic cues. After some initial profit-taking earlier in the week, a sharp midweek rebound resumed bullish momentum, followed by a healthy consolidation phase. By the end of the week, the Nifty rose 0.52% to settle at 26,202.95, while the Sensex gained 0.56% to close at 85,706.67.

The rally was largely underpinned by rising expectations of a 25 basis point rate cut by the US Federal Reserve in December, which boosted global market sentiment. Hopes of progress in Russia-Ukraine talks also supported, raising expectations of softer crude oil prices. On the domestic front, strong growth projections and resilience in select sectors boosted investor confidence, although lingering concerns over weak exports continued to weigh on the upside.

Key factors that could influence market movements as trading resumes this week:

RBI MPC Result: The most crucial event will be the RBI’s monetary policy meeting on December 5, where the outlook for inflation, growth and rate-cuts will be commented on.

Auto Sales Statistics: Domestic focus will be on monthly auto sales.

Domestic Data: HSBC Manufacturing, Services and Composite PMI readings will be released next week.

Global Factors: Globally, US macro data will remain a dominant driver of risk sentiment as markets revise expectations for the Federal Reserve’s December policy decision and its implications for foreign flows.

Technical Factors: Ajit Mishra of Religare Broking noted that the Nifty continues to hold fresh highs, and the bias remains positive. “The next upside level is placed at 26,500, followed by 27,000. On the downside, the 20-DEMA around 25,900 acts as initial support, with the next key level at 25,700,” he added.

“Investors should continue to adopt a buy-on-dips approach near key support levels and prioritize large caps for stability. On the other hand, traders should continue trailing stop-losses at profitable positions and focus on sectors showing strong price structure and consistent institutional demand,” he suggests.

CRUDE: WTI crude traded on track for a fourth straight monthly decline, its longest losing streak in more than two years, as concerns over oversupply deepened. Market sentiment was also shaped by President Putin’s comments that President Trump’s Ukraine peace proposals could influence future negotiations, potentially easing sanctions and allowing Russian crude to re-enter global markets. Still, traders remain cautious, skeptical of any rapid progress or significant increase in Russian shipments.

“The focus now shifts to Sunday’s virtual OPEC+ meeting, where officials are likely to back a plan to halt output increases as early as 2026 while reviewing long-term capacity strategies,” said Rahul Kalantri, VP of commodities at Mehta Equities.

INR Movement: The overall trend for USD-INR remains bearish, with the rupee continuing to face resistance near 89.25 due to sustained dollar strength and mixed FII activity.

“Despite no clear progress on the India-US trade deal and uncertainty still dominating sentiment, rupee weakness may continue towards the 90.00 mark. Immediate resistance for the rupee now stands at 89.20, while the bias remains firmly on the downside,” noted Jatin Trivedi, VP Commodity Research, LKCURR-CURR-Search-Analyst.

FII Activity: On Friday, foreign institutional investors (FIIs) poured into Indian equities at Rs. 3,672.27 crore in net sales, while domestic institutional investors (DIIs) contributed Rs. 3,993.71 crore were net buyers.

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