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Below the Weekly Note 22nd Nov 2025 by Mr. Ajit Mishra - SVP, Research, Religare Broking Ltd

Markets Gain Modestly as Value Buying and Trade Deal Optimisium

Market Summary

Markets ended the week on a positive note, with the Nifty rising 0.61% to 26,068.15 and the Sensex advancing 0.79% to 85,231.92. Sentiment was supported by expectations of progress on an India–US trade deal, although gains were capped by weak domestic macro-economic data and subdued global cues.

Key Market Drivers

Domestic data points presented a mixed picture. India’s HSBC Flash Composite PMI eased to 59.9 in November from 60.4 in October, signalling a mild slowdown in private-sector activity due to softer manufacturing momentum. October’s core sector output remained flat year-on-year, a sharp moderation from the 3.3% growth reported in September. Merchandise exports contracted by 11.8% in October, driven by elevated U.S. tariffs, prompting the RBI to extend the export proceeds realisation period from 9 to 15 months to ease liquidity pressures on exporters.

Unemployment held steady at 5.2% in October, indicating stable labour conditions. Meanwhile, expectations for India’s Q2 GDP improved, supported by festive demand and a pickup in investment activity. Globally, investor sentiment stayed cautious as China’s economic data pointed to weakening consumption and industrial output, while discussions around a potential AI bubble and ongoing U.S. tariff developments continued to influence trade positioning.

On the institutional front, FIIs turned marginal buyers after weeks of persistent outflows, while DIIs continued their supportive stance.

Sectoral Snapshot

Sectoral performance was mixed. IT staged a strong rebound, gaining 1.61% on the back of stable global demand and favourable currency trends. Auto and banking stocks also closed with healthy gains, driven by sustained demand. Conversely, Realty and Metal names dragged the market, correcting after recent outperformance and reacting to concerns around softer domestic activity and weaker global commodity sentiment.

In the broader market, smallcaps continued their underperformance with a decline of over 2%, while midcaps also saw profit-taking after record highs, falling 1.13%—a clear sign of cooling risk appetite.

Key Events to Watch

In the coming week, volatility may increase ahead of the November derivatives expiry. Domestically, markets will track several high-impact macro releases including Q2 GDP data, industrial production, government budget value, bank loan and deposit growth, and forex reserves. Globally, investors will continue to monitor U.S. market performance and key economic releases for direction. These indicators are expected to shape near-term risk sentiment and influence foreign flows.

Technical Outlook

* Nifty: The index maintains a positive structure and appears positioned for a potential new record high. Immediate support lies near 25,800 (20 DEMA), followed by 25,550. A decisive breakout above 26,300 could pave the way towards 26,500.

* Bank Nifty: The index continues to mark new highs, though the performance of private-sector banking heavyweights will be crucial to sustain momentum and outperformance. Otherwise, some consolidation may emerge. Key support is placed around       the 57,500–58,200 zone, while sustained strength could take it towards 59,500–60,500.

* Broader Market: Market breadth has weakened as midcaps and smallcaps corrected. Participation remains selective, with indications pointing toward continued underperformance in the smallcap space.

Strategy Ahead

With macro signals turning mixed and global cues offering limited clarity, a balanced approach is advisable. Investors may prioritise sectors with visible earnings traction and renewed interest—such as banking, auto, IT, and consumption—while remaining selective in other pockets. Traders should exercise caution around expiry and key macro releases, using a buy-on-dips strategy only near established support levels. Emphasising disciplined risk management, strict stop-losses, and a preference for large-cap stability over broader market volatility remains prudent.

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