• The Indian market outlook is influenced by global cues, domestic economic indicators, and investment flows.
• The Reserve Bank of India's positive commentary and reduction in the cash reserve ratio have boosted the market.
• The Nifty index is expected to reclaim the 25,000 level, influenced by government capital expenditure and momentum stocks.
• The market direction will also be shaped by the performance of specific stocks and IPO action.

The upcoming week's Indian market outlook is expected to be shaped by a blend of global cues, domestic economic indicators, and investment flows from both foreign and domestic institutional investors. This perspective was shared by experts on Sunday, December 8, 2024. Pravesh Gour, Senior Technical Analyst at Swastika Investmart, emphasized the role of significant macroeconomic releases in determining the market sentiment. These include retail inflation and industrial production data from India, as well as US Core CPI and unemployment figures.

The Indian stock market has been on an upward trajectory, ending the previous week with gains. This marked the third consecutive week of the stock market closing in the green. The Nifty closed at 24,677 with a gain of 2.27 per cent or 546 points, and the Sensex closed at 81,709 with a gain of 2.39 per cent or 1,906 points. The Reserve Bank of India (RBI) has played a significant role in this rise, with its positive commentary being considered a major factor.

RBI's Role and Foreign Investments

The central bank announced a reduction in the cash reserve ratio (CRR) by 0.50 per cent in the December monetary policy, a move that is expected to increase liquidity in the banking system. The RBI also expressed confidence about strong demand and industrial growth. Foreign investors' buying in the stock market has also been a significant contributor to this positive trend. Last week, foreign institutional investors (FIIs) bought about Rs 12,000 crore in the Indian markets, and domestic institutional investors (DIIs) bought about Rs 1,800 crore.

Puneet Singhania, Director at Master Trust Group, noted that the Nifty has again come above the 21-day moving average after trading below it for five consecutive weeks, indicating a bullish stance. He identified 24,250 as a strong support for Nifty and suggested that the index may aim to reclaim the psychological 25,000 level.

Vinod Nair, Head of Research at Geojit Financial Services, stated that investors are now accumulating momentum stocks as the expected pick-up in government capital expenditure may provide some impetus to infra, capital goods, realty, cement, and metal industries in H2FY25.

Stock Performance and IPO Action

He added that the market direction for the next week would be influenced by the release of US payroll and US CPI inflation data, which will provide insights into the Fed's December meeting. In addition to these factors, the market is also expected to be influenced by the performance of specific stocks.

For instance, Dharmesh Shah of ICICI Securities recommends buying SBI and Nalco. This recommendation is based on the expectation of significant job growth in the US, as reported by Reuters. Nonfarm payrolls are expected to have increased by approximately 200,000 jobs last month, reflecting a positive trend in employment.

The market is also keeping a close eye on the performance of the Nifty 50. Experts suggest that the index may aim to reclaim the 25,000 level next week. On the higher end of the spectrum, 24,800 followed by 25,000 - 25,100 is likely to be seen as the next potential resistances for the benchmark index in the upcoming week.