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Informist, Tuesday, Dec. 2, 2025

 

By Gopika Balasubramanium

 

MUMBAI – The benchmark equity indices are likely to move in a thin range Wednesday after their recent record-breaking rise. The lack of progress on the India-US trade deal negotiations and selling pressure as foreign investors divest their holdings continue to weigh on investor sentiment. While the narrative of a rebound in corporate earnings growth remains intact, the rupee hitting new lows is a concern, analysts said. Some said, however, that valuations of large-cap stocks are reasonable now.

 

"I think the market will be in range for December, maybe it can have an upside or downside of 2-3%," Praveen Bokade, head of resaerch at IDBI Capital Markets & Securities, said. He said the Nifty 50 is likely to stay between 26300 and 25700 points--300 points on either side of the current level. "But since there is currency weakness and (government) bond yields are also rising, ... if the RBI is slightly not accommodative, slightly hawkish, then probably market could see some selling," Bokade said. "Rate-sensitive sectors such as banking and consumer sectors would see some pressure."

 

The Nifty 50 ended Tuesday's session 0.6% lower at 26032.20 points. The 50-stock index fell below the 26000 points level to an intraday low of 25997.85 points. The BSE Sensex also closed 0.6% lower at 85138.27 points. The India Volatility Index, which measures nervousness among domestic investors, closed 3% lower at 11.2275.

 

"The market is currently in a constructive consolidation phase rather than a correction," Bhavya Shah, technical analyst at StoxBox said. Technical data indicate that the Nifty 50 is likely to find strong support between 26000 and 25900 points. The resistance is at 26300 points.

 

Earlier in the day, global brokerage Nomura set a target of 29300 points for the Nifty 50 for the end of 2026. The target suggests a valuation of 21 times the consensus earnings estimate for 2027. The index is currently trading at 20.7 times the one-year forward consensus earnings, which is close to the higher end of the trading range of 17-21 times over 2023-2025, Nomura said. "We think the valuation is not expensive and some expansion in the valuation multiple can't be ruled out," the broking firm said.

 

Nomura's view is similar to that of other brokerages such as Emkay Global Financial Services and Goldman Sachs, who have set targets of 28000-29000 points for the end of 2026. J.P. Morgan has a target of 30000 points for the coming calendar year.

 

The downside risks are global factors, including a rise in risk premium, higher commodity prices, and trade deficit, the brokerage said. "We suggest that investors avoid narrative-driven richly valued stocks, consider increasing exposure to underperforming exporters, and be selective on segments with government intervention," Nomura said.  End

 

Edited by Rajeev Pai

 

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