India’s stock market kicked off December 1, 2025 with fireworks: the Sensex and Nifty 50 opened at fresh lifetime highs, powered by blockbuster GDP numbers and expectations of easier global interest rates. But by mid-session, gains had cooled, the rupee had slipped to a record low, and all eyes had shifted to the Reserve Bank of India’s (RBI) policy meeting later this week. [1]
Below is a full breakdown of where the market stands today, the macro forces driving sentiment, and what leading analysts are forecasting for Nifty, Bank Nifty and key sectors.
Record-Breaking Start to December: New Highs for Sensex, Nifty and Bank Nifty
Indian equities opened with a strong gap-up on Monday, December 1:
- Sensex briefly hit a new historic high around 86,159.
- Nifty 50 clocked a fresh peak near 26,325.
- Bank Nifty crossed the 60,000 mark for the first time ever, with financials extending their leadership from November. [2]
By around 9:15–10:15 AM IST, major benchmarks were still comfortably higher:
- Nifty 50 traded around 26,284, up roughly 0.3%.
- Sensex hovered close to 86,000, up about 0.3–0.35%. [3]
State broadcaster DD News also reported that all NSE sectoral indices opened in the green, barring FMCG and chemicals, with Nifty Metal and Nifty Auto leading the rally. [4]
Why the euphoric start?
- GDP surprise:
- India’s GDP grew 8.2% year-on-year in Q2 FY26 (July–September 2025), the fastest pace in six quarters and well above earlier projections. [5]
- Ultra-low inflation:
- CPI inflation in October fell to roughly 0.25%, an all‑time low in the current series, thanks to sharp food deflation and GST rate cuts. [6]
- Expectations of global rate cuts:
- Markets are pricing an aggressive chance of a U.S. Federal Reserve rate cut later this month, supporting risk assets globally. [7]
- Ongoing domestic liquidity and policy support:
- Earlier 100 bps of RBI rate cuts in the first half of 2025, supportive fiscal policy and hopes of further easing have underpinned a strong run-up in blue chips. [8]
From Euphoria to Consolidation: Midday Cool-Off
The early rally did not last in a straight line. Through the late morning and early afternoon, indexes gave up a portion of their gains:
- Around midday, the Nifty 50 slipped back near 26,190, flat to marginally lower.
- The Sensex dipped around 0.1% to roughly 85,630–85,700, after being over 550 points above that level at the morning peak. [9]
Live market blogs highlight a sharp intraday reversal:
- Economic Times’ liveblog noted the Sensex falling over 550 points from its record high, turning negative as Nifty slid below 26,200. [10]
- Financial Express also flagged that, after hitting record levels, the market “slipped into the red”, with Nifty “struggling near 26,200” and Sensex down modestly. [11]
In other words, December began with a “blow‑off” style open followed by healthy profit‑taking, not an outright reversal of trend. Volatility is elevated as traders position for a packed macro week.
The Macro Backdrop: 8.2% GDP and a Historic Inflation Low
Growth: Fastest in Six Quarters
Multiple data points released on Friday paint a picture of a booming but nuanced economy:
- Real GDP: 8.2% in Q2 FY26, compared with 7.8% in Q1 and about 5.6% a year earlier. Growth was driven by manufacturing, services and strong final consumption. [12]
- Nominal GDP: about 8.7%, which is lower than real growth because the GDP deflator is unusually soft—another reflection of very low inflation. [13]
Rating agencies and official economists have responded by raising growth forecasts:
- CRISIL has upgraded India’s FY26 growth projection to around 7%. [14]
Inflation: Near-Zero Gives RBI “Policy Space”
Inflation has surprised even more dramatically:
- CPI inflation in October: around 0.25–0.3%, the lowest reading since the current series began in 2015. [15]
- RBI’s own projections: inflation averaging about 2.6% in FY26, with risks now skewed to the downside according to several economists. [16]
Economists quoted in Economic Times and Financial Express argue that such low inflation leaves “policy space” for at least one more “insurance” rate cut, even as growth looks robust. [17]
RBI MPC This Week: Cut or Pause? Markets Split
The RBI Monetary Policy Committee (MPC) meets from December 3–5, 2025, with a decision due on Friday. The debate over what Governor Sanjay Malhotra will do is shaping today’s market narrative. [18]
What Economists Expect
Different polls give a sense of how divided the street is:
- A Reuters poll of 80 economists (conducted before the latest GDP surprise) found about 80% expect a 25 bps cutto take the repo rate from 5.50% to 5.25%, with most seeing rates on hold through 2026. [19]
- An Economic Times poll of 20 domestic economists shows a narrower split:
- 12 expect a 25 bps cut to 5.25%,
- 8 (including SBI) expect a status quo at 5.50%. [20]
- Indian Express reports that the base case among many analysts has shifted back toward a pause, particularly after the blowout growth print. They see the repo rate most likely held at 5.5%, with tweaks instead to inflation and GDP projections and possibly liquidity tools such as OMOs. [21]
At the same time, brokerage research quoted in live blogs continues to flag the possibility of a cut:
- HSBC’s global investment research team, for example, still projects a 25 bps cut to 5.25% on December 5, pointing to benign inflation and below‑target price pressures. [22]
In plain English:
Dalal Street is treating the December policy as a genuine coin‑toss between a small cut and a pause, with the “no cut” camp gaining ground after the GDP beat.
Whichever way the decision goes, communication around future guidance and growth–inflation trade‑offs will be as important for markets as the headline rate move.
Rupee at Record Low, RBI Intervention Talk
While equities made headlines for their record highs, the rupee quietly set records of its own:
- The currency has fallen to around ₹89.5–89.7 per US dollar, an all‑time low, dragged by persistent foreign equity outflows and uncertainty over a U.S.–India trade deal amid 50% U.S. tariffs on Indian goods. [23]
Economic Times’ live blog suggests that RBI likely stepped in intra‑day to slow the move as the rupee inched worryingly close to the psychological ₹90 mark. [24]
From an equity investor’s perspective:
- A weaker rupee boosts exporters (IT services, pharma, select manufacturing) but:
- It also raises concerns about imported inflation, foreign investor sentiment, and earnings translation for rupee‑denominated portfolios.
For now, equities are clearly looking through the currency stress, prioritizing growth and liquidity, but this divergence cannot persist forever if the rupee slide accelerates.
Global Cues: Gold Surge and Fed Cut Hopes
Global risk sentiment is mixed:
- Gold has climbed to a six‑week high, with silver at record levels, as investors rotate partly into safe havens amid a soft U.S. dollar and profit‑taking in risk assets. [25]
- U.S. futures and major cryptocurrencies are weaker, pointing to a mild risk‑off bias globally, even as markets still price an 87%+ probability of a Federal Reserve rate cut this month. [26]
Asian equities are similarly split, with Japan’s Nikkei under pressure while China and Hong Kong trade higher, according to DD News’ morning round‑up. [27]
For India, this means global cues are supportive but not euphoric—the real engine remains domestic growth, domestic savings and expectations of a friendly RBI.
Sector Check: Banks, Autos and Metals Lead; FMCG Lags
Financials and Bank Nifty
- Bank Nifty crossing 60,000 is more than just a round number—it underscores how financials are leading the uptrend.
- Goodreturns and Reuters highlight strong buying in names like HDFC Bank, ICICI Bank, Axis Bank, SBI and PSU banks, with PSU banks often outperforming private lenders. [28]
- Analysts quoted in Goodreturns expect Bank Nifty to remain the “lead bull” index, supported by improving credit growth, institutional flows into financials, and expectations of rate cuts ahead. [29]
Metals & Autos
- Nifty Metal is among today’s best performers, aided by:
- Record‑high silver prices,
- Expectations of improving global demand,
- Continued hopes of policy support from China. [30]
- Stocks like Hindustan Copper, NALCO, Hindustan Zinc and Vedanta have gained between roughly 1.5–3%. [31]
- Nifty Auto has hit new 52‑week highs, helped by:
- Strong festival and wedding‑season demand,
- Monthly sales expectations,
- Momentum in names such as TVS Motor, Hero MotoCorp, Maruti, Tata Motors Passenger Vehicles (TMPV) and Eicher Motors. [32]
FMCG and Tobacco Under Pressure
- FMCG stocks are underperforming and, in some cases, trading in the red even on a record‑high index day. [33]
- ITC and Godfrey Phillips have been notable losers as reports suggest the government may introduce a new excise duty on tobacco products, replacing the current GST compensation cess. [34]
Breadth: Rally Is Still Narrow
Several sources highlight a key nuance retail investors are feeling:
- According to a Times of India analysis, just 8 heavyweight stocks (HDFC Bank, RIL, ICICI Bank, Bharti Airtel, L&T, ITC, Infosys, SBI) account for about 50% of Nifty’s weight, and roughly 330 of the NSE 500 stocks remain below their September 2024 peaks. [35]
In other words, headline indices are at all‑time highs, but many portfolios are not—a classic sign of a “narrow” market led by mega‑caps.
Nifty & Bank Nifty Forecasts: How Far Can the Rally Go?
Technical and derivatives strategists are cautiously optimistic but emphasise selective participation.
Nifty 50 Technical View
Sudeep Shah, Head of Technical Research & Derivatives at SBI Securities, outlines the following roadmap for the week starting December 1: [36]
- Nifty has “shattered its 14‑month barrier” and delivered its strongest-ever weekly and monthly close, confirming a primary uptrend.
- Short‑term upside targets:
- Initial resistance around 26,500,
- Next leg toward 26,800, provided support zones hold.
- Key support:
- The 20‑day EMA area of roughly 25,900–25,950 is seen as strong support on any pullback.
Shah also notes:
- While Nifty Midcap 100 has made new highs, gains are concentrated in select stocks.
- Nifty Smallcap 100 has fallen for two consecutive weeks and trades below its 20, 50 and 100‑day EMAs, signalling cautious sentiment in the smallest segment of the market.
The base case: the uptrend remains intact but participation is likely to stay narrow, with sector rotation and stock‑specific breakouts driving returns rather than a broad “everything rallies” phase.
Bank Nifty Outlook
For Bank Nifty, the tone is even more bullish: [37]
- The index has logged four straight weeks of gains and a new all‑time high.
- Momentum oscillators like RSI are in “super‑bullish” territory, and Bank Nifty has even closed above its upper Bollinger Band on the weekly chart—typically a sign of powerful trend strength.
- Short‑term upside: technical projections put near‑term objectives in the 60,300–61,000 region.
- Support: the 58,700–58,800 zone is viewed as critical; a sustained break below this would be the first meaningful warning sign for bulls.
Stock Ideas in Focus (Not Investment Advice)
Analyst notes circulating this morning highlight a few individual stocks riding the current themes:
- 360 ONE WAM (wealth and asset management) – flagged by SBI Securities as having broken out above key moving averages and a downtrend line, supported by strong momentum indicators. [38]
- Mahindra & Mahindra (M&M) – seen as technically strong after defending its 20‑day EMA and rebounding on volume, benefiting from the broader auto uptrend. [39]
- Other mentions across various reports include metal plays like Hindustan Zinc, JSW Steel, and PSU banks, as traders look for high‑beta ways to ride the GDP and rate‑cut narrative. [40]
These are analyst opinions from brokerage research, not guarantees of performance. Any stock‑specific action should be evaluated against your risk profile, time horizon and asset allocation.
Key Events and Levels to Watch This Week
- RBI MPC (December 3–5, 2025)
- Scenario 1 – 25 bps cut to 5.25%:
- Likely positive knee‑jerk for financials, rate‑sensitives (autos, real estate, consumption).
- Could add marginal pressure to the rupee if not backed by hawkish forward guidance.
- Scenario 2 – Status quo at 5.5%:
- Short‑term disappointment for rate‑cut bulls but supportive for currency stability.
- Focus may shift to RBI’s revised inflation and growth projections and any liquidity measures (OMOs). [41]
- Scenario 1 – 25 bps cut to 5.25%:
- Parliament Winter Session (December 1–19)
- Markets are watching bills related to excise changes, health security cesses and broader economic reforms, including a proposed tobacco‑related excise bill that has already hit cigarette makers. [42]
- Global triggers
- Market levels
- Nifty 50:
- Supports: ≈25,900–26,000
- Resistances: ≈26,500 and 26,800
- Bank Nifty:
- Supports: ≈58,700–58,800
- Resistances: ≈60,300 and 61,000 [45]
- Nifty 50:
What It All Means for Investors
If you’re looking at the India stock market today, a few themes stand out:
- The structural story is intact—and arguably stronger.
- 8.2% GDP growth with ultra‑low inflation is a rare combination. It supports the case for India as one of the fastest‑growing large markets through FY26, even if growth moderates slightly. [46]
- But the rally is narrow.
- Index highs are being driven by a cluster of large financials, IT and select conglomerates; a majority of broader‑market stocks are still below old peaks. This argues for careful stock selection rather than blind index chasing. [47]
- Policy risk is elevated this week.
- With the RBI decision genuinely finely balanced and the rupee at record lows, event risk is high. Short‑term traders should be prepared for spikes in volatility around December 5. [48]
- Currency and tariffs are medium‑term watchpoints.
- A persistently weak rupee and unresolved U.S. tariff issues could eventually dent margins and foreign inflows, even if domestic growth looks solid. [49]
- Quality, diversification and discipline still matter more than headlines.
- For long‑term investors, the focus remains on earning growth, reasonable valuations, sector diversification and rupee risk management, rather than trying to front‑run every tick around RBI or GDP prints.
Quick FAQ: India Stock Market – December 1, 2025
Q: Why did Sensex and Nifty hit new record highs today?
Because markets are reacting to stronger‑than‑expected Q2 GDP growth (8.2%), record‑low inflation, improving global rate‑cut expectations and ongoing domestic liquidity. These factors together reinforce the narrative of India as a high‑growth, relatively low‑inflation outlier among major economies. [50]
Q: Is the RBI definitely cutting rates this week?
No. Polls show a split: a slim majority of economists still expect a 25 bps cut, but a growing camp—including some large banks—now sees a pause, especially after the GDP beat. Markets are treating it as a close call. [51]
Q: Is this a good time to invest in Indian stocks?
It depends entirely on your risk tolerance, time horizon and allocation:
- Valuations in large‑cap benchmarks are elevated but supported by earnings and growth.
- Midcaps and especially smallcaps show mixed momentum and higher risk. [52]
If you are a long‑term investor, many advisers would emphasise systematic investing, diversification and staying aligned with your plan, rather than attempting to time peaks and troughs around one RBI meeting. For personalised advice, you should speak with a qualified financial adviser.
Disclaimer: This article is for informational and journalistic purposes only and does not constitute investment, tax or legal advice. Markets are volatile and past performance is not indicative of future results. Please consult a registered financial professional before making investment decisions.
References
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