Quote on Daily Market Commentary for December 5th 2025 by By Siddhartha Khemka - Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd
Below the Quote on Daily Market Commentary for December 5th 2025 by By Siddhartha Khemka - Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd
Indian equity markets traded higher on Friday as sentiment improved after the RBI’s Monetary Policy Committee, delivered a 25-basis-point rate cut, bringing the repo rate down to 5.25%. Nifty rose 153 points to close at 26,186 (+0.6%), supported by strength in large-cap financials. Broader markets were mixed, with the Nifty Midcap100 up 0.5% while the Smallcap100 index slipped 0.6%, indicating selective participation. Along with the rate cut, the RBI announced Rs.1 lakh crore in open-market government-bond purchases and a USD 5 billion USD/INR swap to bolster liquidity. The central bank also revised India’s FY26 GDP growth projection upward to around 7.3% and lowered the inflation forecast — collectively reinforcing supportive financial conditions and signalling a neutral policy stance. These measures further lifted sentiment in rate-sensitive areas of the market. This led to the rupee strengthening to around Rs.89.96 per USD as the policy moves led to improved currency sentiment. Buying interest strengthened in financials as lower borrowing costs typically spur credit demand and ease funding pressures. Nifty Financial Services rose 1.2%, while the Bank Nifty and PSU Bank indices gained 0.8% and 1.5%, respectively. The auto index also advanced 0.8%, aided by improved affordability for vehicle financing. Defense-related stocks are likely to remain in focus as Russian President Putin meets PM Modi at the annual summit aimed at deepening defense and trade ties. Any policy signals or agreements emerging from the discussions may drive stock-specific activity. Investors now shift their attention to the US Consumer Price Index data due later today, a key input for the US interest-rate trajectory. Going forward, markets are expected to consolidate with a positive bias, supported by the RBI’s rate and liquidity actions, steady domestic flows and rising expectations of a potential US Federal Reserve rate cut.
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