Domestic markets are likely to open on a flat note, as the focus will be on the RBI monetary policy meet outcome. Analysts expect RBI to maintain the status quo and the focus will be on its pronouncements, especially on rupee movement and India’s growth outlook.
According to JM Financial, the RBI has a tough task at hand focusing on its dual mandate of supporting growth while maintaining price stability. Markets are divided on the RBI’s monetary policy expectation in December, specifically after the robust GDP print that followed the series low inflation. In addition to being forward looking, the RBI’s policy decision should also ensure an effective transmission in yields.
“We expect RBI to raise its growth projection by at least 20bps to 7 per cent and lower its inflation forecast by 40bps to 2.2 per cent in FY26. The currency has depreciated sharply in recent days; however, currency management does not come within the ambit of the MPC, hence the policy decision will not be aimed in this direction. We believe that the markets lack direction and the need of the hour will be effective communication by the regulator. Hence, regardless of whether a rate cut is delivered or a status quo is maintained, the tone of the policy will be the key monitorable. The RBI can announce OMOs to ensure that appropriate liquidity is maintained, which, along with a change in stance to “accommodative”, will soften yields,” he added.
Gift Nifty at 26,185 signals a flattish opening for domestic markets.
Ponmudi R, CEO of Enrich Money, said global markets are trading mixed in early Asian hours as investors turn cautious ahead of next week’s US Federal Reserve policy outcome.
On the domestic side, GIFT Nifty signals a flat opening as investors await the outcome of the three-day RBI monetary policy review today. While persistent weakness in the Indian rupee has accelerated FPI outflows in recent sessions, India’s strong Q2 GDP growth of 8.2 per cent and steady DII inflows continue to provide an underlying cushion for domestic equities.
US equities ended on a mixed note, with the Dow closing marginally lower, while the S&P 500 and Nasdaq managed modest gains. Across Asia, sentiment remains uneven. “Japan’s Nikkei is down around 1.3%, while South Korea’s Kospi is trading 0.33% higher, supported by selective buying. WTI crude hovering near $59 per barrel is offering some comfort for India on both the inflation and current account fronts,” he added.
Meanwhile, the derivative market signals a cautious outlook.
The derivatives landscape reflects a guarded approach by the traders, with call writers aggressively adding positions at near and at-the-money (ATM) strikes. In contrast, put writers have partially scaled back their positions and shifted exposure to lower strikes, suggesting expectations of continued consolidation or a marginally negative undertone, said Dhupesh Dhameja, Derivatives Research Analyst, SAMCO Securities
“A substantial build-up of nearly 97.49 lakh call contracts at the 26,100 strike firmly establishes it as a heavy resistance ceiling. Meanwhile, strong put open interest of 1.00 crore contracts at the 26,000 strike underscores this level as a critical support base. The Put-Call Ratio (PCR) recovered to 0.80 from 0.68, yet continues to hover in the bearish zone, highlighting persistent caution and the dominance of call writers around higher levels,” he added.
Published on December 5, 2025
