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Consolidation near peak, eyes on new highs…

ICICIdirect Research 05 Dec 2025 DISCLAIMER

Index extended consolidation in the vicinity of All Time High over third consecutive week and settled the week on a flat note at 26190 as deprecating rupee weighed on the market sentiment.
Broader markets notably lagged, with Midcaps down 0.80% and Smallcaps slipping 2%.
Sectorally, beaten-down IT stocks roared back by gaining >3% coupled with traction in auto and metal stocks while PSU banks took a much-needed breather.


What we expect:
RBI’s dovish stance boosted market sentiment that helped index to recoup intra-week losses tracking depreciating rupee. A clean breakout above 26,300 could recharge the rally and set the stage for 26,800 in the coming weeks. Hence, dips should be utilized to accumulate quality stocks as key support is placed at 25700.
Failure to sustain above 26300 would result into prolonged consolidation in 26300-25700 range amid elevated volatility ahead of upcoming Fed policy and inflation print
Ratio chart of Nifty Midcap vs Nifty 500 has formed a cup & handle pattern. Breakout would confirm outperformance of midcap stocks with Nifty 500 universe

Key Monitorable:
US–India Trade Talks: A visiting US trade delegation may unlock breakthroughs. A positive outcome could boost market sentiment and possibly bring FIIs back
Fed Rate Decision
India CPI Print
Rupee Watch: Indian Rupee is approaching upper band of 7 years rising channel, indicating impending trend reversal which would help to revive the market sentiment 

The recent sharp depreciation in Rupee doesn’t necessarily suggest weakening economy. On the contrary, it supports export-oriented sectors. Moreover, with domestic fundamentals seem resilient with low inflation and robust growth, it should help in overcoming the obstacles with tariff issues. The suppressed crude oil prices should not put much pressure on import bill as well. Additionally, RBI rate cuts and lower tax burden should be supportive for the India’s consumption story.

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