Weekly Snapshot — Week ending Fri, 21 Nov 2025
- Indian benchmark indices ended the week higher on Fri, 14th Nov 2025
- The positivity set by Bihar election victory saw the early part of the week on a bullish note but soon that was short lived as other global/macro factors started impacting the markets
- Nifty50 closed at 26,068, which was 0.6% higher than previous week, after quite a bit of volatility
- BankNifty made fresh highs earlier in the week but ended at 58,868, also +0.6% higher than previous week
- Midcaps & smallcaps underperformed
Key Driver and Risks
Drivers this week
- Ultra-low inflation print: October CPI fell to a multi-decade/record low (0.25% YoY), reinforcing hopes for an RBI rate cut cycle starting soon and boosting risk appetite for equities.
- Momentum in large caps / banking: Reliance, HDFC Bank and other large caps delivered strong gains mid-week, pushing indices close to record levels.
- Mixed FII interest: Foreign portfolio flows were choppy day-to-day, but some data showed rising foreign holdings in early–mid November, providing support at index highs. Friday saw them again selling cautioning investors to be watchful on that front.
Key risks
Supply-side shocks to food/agri: While CPI is low now, weather or supply issues could re-inflate food prices and complicate RBI’s easing calculus.
Profit-taking around record levels: Indices were vulnerable to reversals (Friday’s pullback showed that).
Global macro / US rates volatility: Ambiguous US jobs/data and Fed talk can trigger risk-off moves and dent flows into India.
Macro & policy backdrop
- Inflation: October CPI plunged to 0.25% YoY, the lowest in the current series — a large disinflation surprise that has economists and markets eyeing rate cuts.
- RBI stance: RBI has kept repo at 5.50% since June; market and some strategists now price a potential 25 bps cut at the December MPC given the disinflationary surprise.
- External: USD/INR, crude and global yields remain watch-points — any sudden moves there will influence FIIs and market direction.
Fundamental view
- Earnings season & quality bias: Corporate earnings (large caps) continue to show resilience; however, breadth is narrower — gains concentrated in a subset of financials, select consumer & energy names.
- Individual stocks make sense: That supports a stock-pick, quality-bias rather than broad index exposure and hence individually researched, select stocks with positive trend would be best bet
- Valuation: With indices near all-time highs, valuations look demanding for broad long positions; attractive setups are likely to be individual companies with visible earnings upgrades and forward looking positive growth plans
Technical / market tone (short-term)
- Medium-term uptrend remains intact (indices testing/near record highs), but short-term momentum cooled on Friday as profit-taking pulled Nifty below ~26,100.
- Daily price action shows higher volatility and vulnerability to pullbacks.
- Meanwhile, trends emerging in the DOW/NASDAQ can have some ripples in Indian bourses
Outlook — coming week
- Market direction: Expect range-bound to slowly positive bias if global cues remain benign and no negative macro surprise emerges.
- What to watch:
- Global macro cues (US data / Fed commentary) — a volatile US jobs print or hawkish Fed commentary can trigger corrections.
- US-India Trade deal – if this much discussed/hyped deal comes through in India’s favor, then markets could see a strong bullish sentiment prevailing
- FII flows / DII buying patterns — continued inflows would support new highs; renewed selling could accelerate pullbacks.
- Domestic data / corporate updates — any upside earnings revisions or guidance upgrades will tilt leadership toward cyclical/financials.
