Stock-specific action may continue at higher levels

On the back of improving global risk sentiment and supportive domestic factors, markets extended their winning streak for a third straight week, recording new lifetime highs. Amidst uncertainty over India–US trade discussions, Russia-Ukraine ceasefire developments, positive global markets, rupee depreciation, and expectation of interest rate cut by Fed and RBI in December; markets displayed rangebound activity.

For the week, the Sensex index rose 474.75 points or 0.55 per cent to end at 85,706.67; and the Nifty jumped 134.8 points or 0.51 per cent to end at 26,202.95. Despite benchmark indices flirting with lifetime highs, the broader market still appears hesitant. The Nifty Midcap 100 managed to hit a new all-time high, indicating continued institutional interest in quality mid-sized names.

On the other hand, the Nifty Smallcap 100 declined for the second consecutive week and remains below its 20, 50, and 100-day EMAs. Meaningful participation from small caps looks uncertain in the near term. For a meaningful re-rating, small-cap companies must demonstrate steady improvements in earnings and margins to reassure investors that the worst is over.

The rally is therefore expected to remain extremely selective, where sector rotation and stock-specific action may continue to support higher levels. On the sectoral front, Nifty Pharma, Nifty Media, Nifty PSU Bank, Nifty Bank, Nifty Metal, Nifty IT, and Nifty Private Bank added 1-2 percent. However, Nifty Defence, Oil & Gas are down 1 per cent each.

The FIIs sold equities worth Rs 3659 crore, while DIIs continued their buying with equity purchases worth Rs 22,762.62 crore. The Indian rupee has touched a fresh record low of 89.49 per dollar, finishing at 89.45 per dollar against the previous week’s close of 89.40.

The rupee had been witnessing steady, gradual depreciation over seven months and in line with the broader trend in other emerging market currencies. The pressure mainly came from global factors: a stronger dollar, high US interest rates and continued volatility in global financial markets. India’s real GDP growth for the quarter ending September 2025 came in at 8.2 per cent, well above projections and ahead of consensus estimates. Growth was broad-based on both GDP and GVA metrics.

On the supply side, manufacturing and most service-sector categories registered strong expansion. Demand indicators echoed this trend, with private consumption and investment continuing to demonstrate healthy momentum. A rebound appears increasingly likely in 2026. The earnings downgrade cycle is largely behind us, with recent policy measures — rate cuts and GST rationalization — filtering through consumption and credit.

Some global investors are cautiously optimistic about the market’s next move, viewing the recent tech-driven decline as a welcome correction that has brought down the valuations of the more speculative market areas. It is pertinent to observe that the US market’s last week’s upturn, which pushed the S&P 500 and Dow into the black for November, helped notch a seventh consecutive month of gains.

That marks the blue-chip index’s longest winning streak since the start of 2018. Silver front-month futures jumped to $56 per troy ounce and hitting a record high.

Analysts attributed the surge to a supply squeeze, with Chinese inventories at the lowest level in a decade, as well as expectations for another Fed cut. Prices for silver, which holds value as both a precious and an industrial metal, have almost doubled this year. Further gains are indicated. Bitcoin topped $92,000 before paring some gains. It has regained ground after sliding below $81,000 last week but remains far off its October peak above $126,000.

It’s very difficult to predict when the next recession or stock market crash will come, so many of the best investors don’t even try. Instead, look for good companies with the strength to make it through the occasional challenging economic environment.

FUTURES & OPTIONS / SECTOR WATCH

The settlement week saw markets remain largely range-bound. Despite benchmark indices marking lifetime highs, through the past week indices oscillated within a narrow intra-week range. The move to lifetime highs was not backed by strong participation across broader markets.Rollovers in Niftyfutures declined to 69 per cent (last month 75 per cent), well below 3-month average of 79 per cent, in value terms at Rs37600 Cr. versus Rs39500 Cr.

On other hand, market wide Rollovers stood at 91 per cent (Flat M-o-M market wide 92 per cent) in value terms 487433 Cr which declined last month 493094 Cr. Bank Nifty outperformed the broader markets, recording a weekly gain of 1.5 per cent, while the Nifty closed with a modest rise of 0.50 per cent, supported by expectations of improved earnings and a potential rate cut.

In the options segment, the highest Call open interest for Nifty was observed at the 26,500 and 26,200 strike levels, whereas notable Put open interest was concentrated at the 26,000 and 26,100 strikes. For Bank Nifty, significant Call open interest was seen at the 60,000 strike, with substantial Put open interest at the 59,000 strike. Implied volatility (IV) for Nifty’s Call options settled at 9.84 per cent, while Put options concluded at 10.79 per cent.

The India VIX, a key indicator of market volatility, concluded the week at 11.78 per cent. The Put-Call Ratio Open Interest (PCR OI) stood at 1.22 for the week. Nifty began this expiry trading above its rollover range of 26,050–26,100, which remained unchanged from the previous series. The outlook stays positive as Nifty futures continue to trade above these rollover levels.

The coming week may see a stable to mildly positive start, but sustainability above 26,300 will be crucial for further upside. On the higher side, the levels of 26,310 and 26,500 will act as resistance. Supports exist at 25,950 and 25,700 levels. These levels will be key in deciding the next directional move.

For present, traders are advised to adopt a buy-on-dips approach as long as the market sustains above its support zone. Stocks looking good are BOB, BHEL, Laurus Labs, HUDCO, Paytm and M&M. Stocks looking weakare Adani Enterprises, Astral, Exide Inds, Dixon Technologies, Lodha and Trent.

(The author is a senior maket analyst and former vice-chairman, Andhra Pradesh State Planning Board)

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