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Informist, Wednesday, Dec. 3, 2025

 

By Gopika Balasubramanium

 

MUMBAI – The benchmark equity indices are likely to fall in the upcoming sessions with weakness in the rupee weighing on investor sentiment. While there are expectations that India and the US will reach a trade deal by the end of the calendar year, the lack of any sign of significant progress is also worrying investors, analysts said. However, they said the indices have risen past the levels they were at before the US imposed tariffs on Indian exports and hence the impact has been largely priced in. With expectations of strong earnings growth intact, analysts see the current weakness as a temporary phenomenon.

 

Wednesday, the Indian currency plummeted to a record low of 90.29 a dollar in early trade, souring investor sentiment. It closed at 90.19 a dollar, the third successive session that the rupee had ended at a record closing low. The fall in the rupee was primarily due to aggressive dollar purchases by banks on behalf of importers and foreign institutional investors, according to dealers in the foreign exchange market. Foreign investors bought dollars as they sold Indian equities amid uncertainty over the India-US trade deal, rupee dealers said.

 

"Currency depreciation along with volatility among Asian peers are the main cause of concern in the domestic market," said Vipin Kumar, assistant vice-president, technical and derivatives research, Globe Capital Market. The chart structure will be strong as long as the Nifty 50 stays above 25800-25750 points on a closing basis and a fall to those levels should be taken as a fresh buying opportunity," Kumar said. The 50-stock index is likely to see a further upside only after it crosses 26150 points.

 

Wednesday, the Nifty 50 closed at 25986 points, down 46.20 points or 0.2%. The 50-stock index fell to a low of 25891 points intraday, falling below the key support level of 25900 points. The weakness in the index was despite two heavyweights, HDFC Bank and ICICI Bank, rising, indicating that the sell-off was broad-based while buying was selective.

 

The BSE Sensex closed at 85106.81 points, down 31.46 points. "Short-term bearish sentiment has begun," Rupak De, senior technical analyst at LKP Securities, said in a note. If the Nifty 50 index recovers from the fall by taking support at 25900 points, it may inch towards 26060 points, he said. The index is seen facing resistance at 26060 points once again, potentially triggering another decline, De added.

 

Information technology and pharmaceutical stocks are likely to see some upside as depreciation in the rupee is a positive for these sectors, analysts said. A majority of Indian IT companies earn a significant portion of their revenue from clients in the US and a weak rupee boosts their profitability. A sharp rise in expectations of the US Federal Open Market Committee trimming the federal funds rate at its meeting next week is also a positive for the IT sector. Analysts said the valuations of Indian IT companies are reasonable.  End

 

Edited by Rajeev Pai

 

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