Summary of the session
Indian equities rallied on Friday, 5 December 2025, as investors cheered a 25 basis‑point reduction in the Reserve Bank of India’s (RBI) repo rate to 5.25 %. Rate‑sensitive sectors like banking, non‑bank finance companies (NBFCs), autos and real estate outperformed. The rupee firmed below the 90‑per‑US‑dollar mark and bond yields eased, helping sentiment. Foreign institutional investors were modest net sellers but domestic institutions remained net buyers. Traders noted that with the RBI sounding confident about growth (raising FY26 real GDP growth forecast to 7.3 % and lowering the inflation projection to 2 %), equities are pricing in a softer rate environment for 2026. Broad market breadth was mixed, with mid‑caps edging up but small‑caps underperforming.
Key indices
| Index | Level | Δ (pts) | % change |
|---|---|---|---|
| S&P BSE Sensex | 85 712 | +447 | +0.52 % |
| Nifty 50 | 26 186 | +152 | +0.59 % |
The Sensex and Nifty closed at record‑high levels after reclaiming key round numbers (85 700 and 26 000). Mid‑caps rose, while the small‑cap index slipped.
Sectoral performance
| Sector index | Performance (%) | Notes |
|---|---|---|
| Nifty PSU Bank | +1.51 % | Banks and government‑owned lenders rallied as the rate cut improves borrowing demand and margins. |
| Nifty IT | +0.90 % | Gains were driven by large‑cap IT names on expectations of higher US spending and strong order wins. |
| Nifty Financial Services | +0.98 % | NBFCs and insurers rallied on lower borrowing costs. |
| Nifty Auto | +0.74 % | Autos benefit from cheaper loans; Maruti and M&M outperformed. |
| Nifty Realty | +0.34 % | Modest gains as lower rates could boost housing demand. |
| FMCG/Pharma/Media | Flat to negative | Defensive sectors lagged; profit‑taking pulled down FMCG names. |
Breadth and market statistics
- Around 3 192 stocks were traded across the BSE and NSE. Of these, 1 335 advanced, 1 769 declined and 88 ended unchanged.
- 36 stocks hit fresh 52‑week highs while 249 slumped to 52‑week lows.
- 66 stocks were locked in their upper circuit limits and 54 hit lower circuits.
- Total market capitalisation of listed companies stood at roughly ₹ 468.6 lakh crore.
- The India VIX (volatility index) eased by about 2.5 %, reflecting lower implied volatility after the RBI announcement.
Top gainers and losers
Major gainers (price change in parentheses):
SBI (+2.53 %), Bajaj Finserv (+2.08 %), Maruti Suzuki (+1.80 %), Bajaj Finance (+1.75 %), HCL Technologies (+1.63 %), Larsen & Toubro (+1.38 %), Mahindra & Mahindra (+1.0 %), Infosys (+0.95 %), Kotak Mahindra Bank (+0.92 %), HDFC Bank (+0.48 %), ICICI Bank (+0.47 %). Financials and autos led the pack on expectations of a loan‑led demand recovery.
Major losers:
Hindustan Unilever (–3.38 %), Eicher Motors/other consumer names (around –1.3 %), Trent (–0.78 %), Sun Pharma (–0.75 %), Tata Motors DVR (–0.72 %). Defensive sectors faced profit‑booking and some high‑beta consumer stocks saw selling pressure.
Drivers of the rally
- RBI rate cut and guidance: The Monetary Policy Committee reduced the repo rate to 5.25 %, its first cut in six months, and hinted at scope for further easing. It raised its FY26 GDP growth forecast and cut its inflation projection, signalling confidence in growth and a benign inflation outlook. Rate‑sensitive segments such as banks, NBFCs, autos and real estate benefited.
- Stable global backdrop: Global equities were largely positive overnight, aided by US indices inching higher on hopes of a soft landing and the Federal Reserve signalling a possible rate cut in early 2026. Asian markets were mixed but off session lows, while European bourses opened firm. Brent crude stayed around the low‑USD 80s per barrel and US Treasury yields drifted lower, reducing pressure on emerging markets.
- Rupee strength: The rupee firmed below the 90 per dollar level after the RBI’s policy statement and intervention. A stronger currency and easing yields boosted foreign investor sentiment.
- DII buying: Domestic institutions continued to accumulate equities, offsetting moderate foreign selling. Expectations of a revival in credit offtake and corporate capital spending underpinned confidence.
Stocks to watch
| Company | Why it matters |
|---|---|
| ITC Hotels | A block deal of up to 7 % stake by British American Tobacco–linked investors is expected at ₹205.65 per share. The transaction could create near‑term supply but removes an overhang in the long run. |
| Diamond Power | Received a ₹747.6 crore letter of intent from Adani Green Energy for 2 126 km of high‑voltage cables; the order underlines growth in renewable infrastructure. |
| Deepak Nitrite | Its subsidiary Deepak Chem Tech started operations at a new nitric‑acid plant in Gujarat. The plant should improve supply security for intermediates; the stock jumped around 1.8 %. |
| Zen Technologies | Won a ₹120 crore order from the Defence Ministry to supply training simulators. Shares climbed as investors bet on rising defence spending. |
| HCL Tech | Announced a global partnership with Strategy (formerly MicroStrategy) to promote the Strategy Mosaic AI platform, signalling deeper exposure to artificial‑intelligence services. |
| PTC Industries | Its subsidiary Aerolloy signed a multi‑year supply pact with Honeywell Aerospace, ensuring long‑term revenue visibility from titanium and super‑alloy castings. |
| InterGlobe Aviation (IndiGo) | The airline cancelled more than 1 000 flights due to crew‑rostering issues and operational disruptions. Shares slipped ~1.4 % amid regulatory scrutiny and passenger backlash. |
| Waaree Energies | US arm Waaree Solar Americas won a contract to supply 288 MW of solar modules. The company has secured seven major orders in two months and reported a robust 130 % YoY jump in quarterly profit. |
| Shriram Pistons & Rings (SPRL) | Announced the acquisition of three Grupo Antolin firms for ₹1 670 crore, expanding its automotive components portfolio. The stock rose nearly 7 %. |
Corporate updates and news flow
- Rate cut implications: Many NBFCs such as Mahindra & Mahindra Financial Services, Sundaram Finance, Shriram Finance, Cholamandalam Investment & Finance, and RBL Bank gained between 6 % and 2.4 % after the RBI decision.
- Patanjali Foods and Wockhardt recovered after extended selling pressure, while Multi Commodity Exchange bounced more than 2 % as traders saw improved trading volumes.
- Patanjali Foods regained about 4 % to ₹547.80 as investors bought the dip. Wockhardt rose roughly 2 % on optimism around its specialty pharmaceutical pipeline.
- Suzlon Energy rallied about 1.75 % after buyers returned, though the stock remains lower month‑to‑date and year‑to‑date.
- InterGlobe Aviation faced operational turbulence due to new flight duty‑time norms, leading to large‑scale cancellations and regulatory scrutiny.
Technical levels and outlook for Monday
- Nifty 50: The index closed well above its 20‑day and 50‑day moving averages. Immediate support is seen around 26 050 and 25 900. A decisive break above 26 300 could open the door to 26 500–26 600 in the near term. The RSI is near 65, indicating strong momentum but not yet overbought. Expect consolidation with a positive bias.
- Sensex: Support lies near 85 400 and 85 000. Resistance is at 86 000 and subsequently 86 350. The index remains in an up‑channel; pullbacks are likely to attract buying.
- Bank Nifty: Although not highlighted in the closing data, Bank Nifty enjoyed a strong session and closed above 58 700. Support is near 58 300 with resistance at 59 100. Lower rates should sustain interest.
Expected market tone for the next trading day
The rate cut has rekindled bullish sentiment, and markets may open on a firm note on Monday. However, after a sharp single‑session rally, some profit‑booking around resistance zones is probable. Traders will watch for follow‑through in banks, autos and NBFCs, while FMCG and pharma could continue to lag. External cues such as US labour‑market data, crude‑oil price movements and any fresh geopolitical developments will influence mood. Overall, the tone is cautiously optimistic with a bias toward sectors leveraged to lower interest rates. Participants should keep an eye on FIIs flows, rupee movement and further commentary from global central banks.
