Market Outlook – December 2025

Positives in November

• Nifty & Sensex touched all time high of 26,310 & 86,055
  respectively after remaining rangebound for more than a year.
• India’s economy grew 8.2% YoY in Q2 FY26, the fastest pace in six
  quarters — easily beating consensus forecasts and last year’s 5.6%.
• Donald Trump’s stance on tariffs toward India has become more
  conciliatory. With ongoing trade negotiations and India’s recent reduction in
  oil purchases from Russia, a positive announcement may be expected soon.
• GST Collections – November ₹1.70 lakh crore Marginal 0.7% YoY rise, with
  import GST up 10.2% but domestic GST down 2.3%. Year-to-date growth remains
  strong at 8.9%.
• Markets rebound in November was also aided by the resolution of the US
  government shutdown, better-than-expected Q2 earnings, softer inflation, and a
  strong NDA mandate in Bihar.
• Oil prices remained low, trading in a range of 58-60$ per barrel.
• Festive demand & GST cut boosted urban & rural consumption sales
  growth. Auto Sales –2W & CV Sales were up – Avrage 30%.
• Globally, financial conditions eased after the Fed’s 25 bps October cut,
  with a possible additional cut in December.

Negatives in November

• The rupee dropped to a fresh record low (around ₹89.49 per US dollar) in
  Nov, weighed down by weak foreign investment inflows, uncertainty over global
  trade deals, and broad currency pressure.
• Manufacturing slump, export-linked industries hurt by tariffs &
  global headwinds. India Manufacturing Purchasing Managers’ Index (PMI) fell
  from 59.2 in October to 56.6 in Nov, highlighting the slowest improvement in
  operating conditions since Feb.
• FIIs were again net sellers in Indian Equity market with outflow of
  17.5K crores.

December Key Events

• RBI Monetary Policy – 5^th Dec. Rate cut expected from RBI
  as inflation has eased considerably. Positive for Markets.
• Russian President Putin visits India – 4-5^th Dec. Key defence deals expected
  to be signed. Positive for Markets.
• Fed Interest Rate Dec – 11^th Dec, expected to cut rates by
  25bps. Positive for Markets.

Investment Strategy & Asset Allocation

• Nifty range 25,500-26,500; downside limited, new highs expected.
• Markets expected to rise cautiously. US trade deal is the major
  announcement markets are waiting for and will not make any big moves unless it
  is announced.
• Q3 FY26 earnings will shape market directions going ahead, expected to
  be higher nos. boosting equity markets.
• Globally, US economic nos. are in line. Solid Nvidia results calmed the
  markets on AI bubble theory.
• Japan inflation nos. needs to be tracked. With appointment of pro-rate
  hike Prime Minister Sanae Takaichi, any interest rate hikes in future will push
  outflow from global markets triggering global volatility.