• The Indian stock market opened in red with the Nifty below 24,200 due to a sell-off in the PSU bank and financial services sectors.
• Despite the initial dip, the market trend remained positive with 1,254 stocks trading in green on the NSE.
• Experts suggest a potential RBI Cash Reserve Ratio cut could positively impact banking stocks amidst a slowdown in growth.
• The market's trajectory is influenced by global trends, institutional investors' actions, and the potential impact of Q2 GDP numbers.

The Indian stock market commenced the week on a somber note, with the Nifty opening below 24,200. The early trade saw a sell-off in the PSU bank and financial services sectors, contributing to the market's initial dip. At approximately 09:42 am, the Sensex was trading at 79,661.99, a decrease of 140.80 points or 0.18 per cent, while the Nifty was trading at 24,118.85, a decrease of 12.25 points or 0.05 per cent.

Despite the initial dip, the market trend remained positive. On the National Stock Exchange (NSE), 1,254 stocks were trading in green, while 1,076 stocks were in the red. Market experts suggested that the Q2 GDP numbers might impact the market, but the impact is unlikely to be significant.

In the event of a sharp market correction, it could present a buying opportunity. Domestic institutional investors (DIIs) are expected to continue buying during dips. Sectors such as pharma, telecom, and digital companies, which are not affected by the slowdown, are considered good buying options during these dips.

Market Trends and Expert Opinions

In the context of a slowdown in growth, the Reserve Bank of India (RBI) may cut the Cash Reserve Ratio (CRR) on December 6. Experts opined, "When CPI inflation is running at 6.2 per cent, the Monetary Policy Committee (MPC) is unlikely to cut rates. A CRR cut will be positive for banks and, therefore, banking stocks are likely to be resilient."

The Nifty Bank was down 177.45 points or 0.34 per cent at 51,878.15. The Nifty Midcap 100 index was trading at 56,571.55 after gaining 178.90 points or 0.32 per cent. The Nifty Smallcap 100 index was at 18,731.80 after gaining 80.85 points or 0.43 per cent.

Akshay Chinchalkar, Head of Research at Axis Securities, provided insight into the daily Nifty trends and the market's short-term outlook. He said, "Nifty's rebound on Friday generated a bullish belt-hold formation as the prior day's losses were largely recouped - this pattern is seen when a bullish day whose open matches the lows immediately follows a long bearish day. He added that Thursday's lows at 23,873 are important for both bulls and bears, while resistance remains steadfast at 24,360 followed by the 24,540 area.

Asian Markets and Institutional Investors

In the Asian markets, the markets of Seoul and Bangkok were trading in red. However, the markets of China, Hong Kong, Japan, and Jakarta were trading in the green. The US stock markets closed in green in the previous trading session.

Foreign institutional investors (FIIs) sold equities worth Rs 4,383 crore on November 29, while domestic institutional investors bought equities worth Rs 5,723 crore on the same day.

Market experts have advised investors to wait and watch, as lots of stock-specific actions are likely to start in response to the inclusion of 45 new stocks to the F&O list. Large Caps in financials, IT, capital goods, and telecom are ideal for accumulation from a medium to long-term perspective. Immediate support is placed at 23,800 and 23,680, which align with strong Fibonacci levels. These zones could act as potential reversal points, offering a buying opportunity if confirmed by price action.

The trajectory of Dalal Street was in stark contrast to Wall Street's reaction, where the Dow Jones surged 3.57%, and the Nasdaq ended 3% higher, reaching fresh record highs. The rupee hit a new lifetime low, slipping 6 paise to close at 84.37 against the US dollar due to weak domestic equities and continued foreign fund outflows.

The Indian benchmark indices erased gains from previous sessions to snap a two-day winning run amid selling across sectors, as investors remained cautious ahead of the Federal Open Market Committee (FOMC) outcome. All the sectoral indices ended in the red with auto, metal, power, telecom, pharma, realty down 1-2 percent. Barring PSU Banks, all the other sectors ended the day in red with Metal and Pharma being the major laggards.