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Informist, Wednesday, Dec. 17, 2025

 

By Arya S. Biju

 

MUMBAI – Domestic equity indices are expected to continue the southward journey Thursday as the domestic currency is expected to remain weak despite the rebound it saw on Wednesday, after the Reserve Bank of India intervened in the market and sold dollars. The Indian rupee is widely expected to remain under pressure until any progress in the India-US trade deal, according to analysts. 

 

On Wednesday, the rupee appreciated against the dollar, after four straight sessions of record closing lows, as banks aggressively sold dollars on behalf of the Reserve Bank of India. The rupee's depreciation has been the primary reason for stock prices falling over the past couple of sessions. The Nifty 50 and the Sensex have lost 0.8-0.9% in the past three sessions--still around 2?low their respective lifetime highs hit earlier this month. 

 

Concerns over a delay in the India-US trade deal are expected to continue to impact on the Indian Rupee in the near-term, analysts said. The rupee may fall to as much as 91.50-92.00 a dollar in the absence of a trade deal between India and the US, but is unlikely to weaken beyond that, Anshul Chandak, Head of Treasury at RBL Bank, said in an interview with Informist. However, he expects a favourable trade deal to pull the Indian currency back to 87.50-88.00 per dollar levels.

 

Both India and the US have been negotiating a trade deal since August, with India particularly looking at lower US tariffs on Indian goods while the US has sought more access to the Indian market. Market participants had been expecting the trade deal to be signed by November. On Tuesday, the chief negotiators from India and the US concluded their discussions on the proposed Bilateral Trade Agreement. The remaining issues now require intervention at the ministerial level, including the commerce minister and the prime minister, a commerce ministry official told Informist. Meanwhile, Chief Economic Adviser V. Anantha Nageswaran had last week said that India and the US are likely to secure a trade deal by March.

 

Further, domestic equities had been witnessing persistent outflow of foreign institutional funds amid uncertainty over the India-US trade deal, a weak rupee, and elevated valuations of domestic equities compared to its global peers. So far in December, foreign portfolio investors have net sold Indian equities worth more than INR 172 billion. While the foreign investors remained net sellers throughout the month, domestic investors continued to support the market. Some analysts expect the potential trade deal between India and the US to bring back foreign investors to the domestic market. 

 

Wednesday, the Nifty 50 closed at 25818.55, down 41.55 points, or 0.2%, and the BSE Sensex ended at 84559.65, down 120.21 points, or 0.1%. During the session, the 50-stock index fell close to the 25750 support level cited by analysts Tuesday, but managed to close above the 25800 level. On Thursday, the Nifty 50 may see further downside towards 25750 level, Anshul Jain, head of research at Lakshmishree Investment and Securities said. He expects the index to find resistance at 25850–25910 levels. Some analysts also expect that the 50-stock index could fall to 25500 points if it breaches 25700-25750 points. The Nifty 50 holding above the 25700–25800 level is crucial for any pullback to materialise in the coming sessions, Bajaj Broking Research said in a note. 

 

Thursday, investors will watch out for the US Consumer Price Index report for November to be released by the US Bureau of Labor Statistics. The 43-day federal government shutdown had forced the bureau to cancel the release of October's Consumer Price Index report. It is unclear what components of the October CPI will be available with the November report Thursday.  End

 

Edited by Deepshikha Bhardwaj

 

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