The beginning of December is likely to see a strong beginning for domestic markets, thanks to buoyant GDP figures. Gift Nifty at 26,515 signals another gain of about 130-140 points at open. However, equities across the Asia-Pacific region are witnessing a pullback in early trade on Monday. Analysts say the bullish trend is likely to continue.
SimranJeet Singh Bhatia, Senior Research Analyst- Equity, Almondz Group, said: “Domestic equities could extend gains after a spectacular rally in recent sessions, as the strong Q2 economic data numbers are likely to buoy investors’ confidence.
India’s GDP in Q2 FY26 posted robust numbers, growing by 8.2 per cent with a strong rebound from the manufacturing sector andhealthy growth in services. Higher-than-expected GDP growth has raised the GDP forecast to 7 per cent, projected by analysts.
While most of the domestic economic readings are on a strong footing, higher valuation of the Indian markets would continue to keep overseas investors at bay and may fuel the risk of further outflows, said Bhatia.
The selling of foreign portfolio investors has slowed down.
Despite volatile FII flows this year, expectations of a rate cut in both the domestic and the US markets is likely to keep the mood upbeat in the medium term, he said adding that
“We expect that with easing of valuations among stocks in the broader market, strong GDP growth, and rate cut expectations, the Indian stock market is expected to perform well in the next couple of months. FII flows back to India will be a key data point to watch.”
According to Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd there is no evidence of a trend reversal in FPI flows.
“FIIs were buyers in some days and sellers in some other days recently. This is an indication that FII flows may change when the circumstances change. And, there are indications of changes. On 27th November both Nifty and Sensex set new records after a long wait of 14 months. Improved corporate earnings in Q2 and prospects of further improvements in Q3 and Q4 have buoyed sentiment. The consensus market view is that 15 to 16 per cent earnings growth is achievable in FY27,” he further said.
Ponmudi R, CEO of Enrich Money, said: Globally, a mild pullback across Asian markets — including the Kospi and Nikkei — is expected to temper the early upside for Indian equities. “While the stronger-than-expected second-quarter GDP print has provided a meaningful sentiment boost by easing concerns over the potential drag from US tariffs, the market still faces notable near-term headwinds. Persistent FII outflows and continued weakness in the Indian rupee against the US dollar remain key pressure points for equities,” he said.
However, robust domestic institutional buying, coupled with rising expectations of a 25-bps rate cut in this week’s RBI policy meeting, is likely to lend solid support to the broader market and cushion downside risks, he added.
Auto stocks to remain in focus
Auto stocks will remain in focus with the disclosure of November sales figures. With the GST cut, analysts expect a buoyant trend in auto sales, especially in 2-3 wheelers.
“Auto stocks will be in focus as November sales data from major automobile manufacturers is set to be released today. These numbers will provide a high-frequency read on whether the post-GST demand recovery is sustaining. A robust set of figures could reinforce confidence in the improving macro environment and further strengthen investor sentiment,” said Ponmudi.
The derivative market also signals a positive bias.
Dhupesh Dhameja, Derivatives Research Analyst, SAMCO Securities, said: Nifty’s impressive November close— marked by fresh record highs and sustained strength at elevated levels — sets a constructive tone for the upcoming series. With the index entrenched in a firm pattern of higher highs and higher lows, technical and derivatives indicators collectively point to the potential for further upside continuation.
“Aggressive put writing at lower levels, coupled with the upward shift in call positions, reflects improving confidence among market participants. A sustained move above 26,350 may trigger incremental short-covering and pave the way toward 26,500. On the downside, any dip toward 26,000 is likely to invite fresh accumulation, keeping the broader bias firmly inclined toward the bulls,” Dhameja added.
Published on December 1, 2025
