Nifty, Sensex hit fresh record highs: RBI MPC outcome in focus; 8 key factors to drive markets this week

Equity benchmarks ended last week on a strong note, extending their winning streak for the third straight week and hitting fresh all-time highs. After early profit-taking, a sharp midweek rebound lifted sentiment, followed by healthy consolidation. By the close, the Nifty gained 0.52% to 26,202.95 and the Sensex rose 0.56% to 85,706.67, reported ET.The rally was supported by growing expectations of a 25-basis-point U.S. Federal Reserve rate cut in December, which boosted global markets. Hopes of progress in the Russia–Ukraine talks also improved risk appetite by raising expectations of softer crude oil prices. Domestically, strong growth projections and resilience in select sectors aided confidence, though weak export trends continued to weigh on the upside.

Here are the 8 key factors likely to influence market movement this week:

1. RBI MPC outcome

The December 5 RBI Monetary Policy Committee meeting will be the most important event. Investors will track commentary on inflation, domestic growth, and the outlook on rate cuts.

2. Auto sales numbers

Monthly auto sales data will offer cues on demand trends and the strength of the domestic consumption cycle.

3. Domestic PMI data

HSBC Manufacturing, Services and Composite PMI readings due this week will help gauge economic activity and momentum across sectors.

4. US macro data

Global sentiment will be guided by US.= economic numbers as markets assess expectations from the Federal Reserve’s December policy decision and its impact on foreign flows.

5. Technical setup

Ajit Mishra of Religare Broking said Nifty’s trend stays positive as it continues to register fresh highs. “The next upside levels are placed at 26,500, followed by 27,000. On the downside, the 20-DEMA around 25,900 serves as initial support, with the next key level at 25,700,” he said, as quoted by ET.He added that investors should adopt a buy-on-dips approach near support levels and prioritise large caps, while traders should keep trailing stop-losses and focus on sectors showing strong price structure and institutional demand.

6. Crude oil movement

WTI crude remained on track for a fourth consecutive monthly decline due to oversupply concerns. Market sentiment was also shaped by President Putin’s comments that President Trump’s Ukraine peace proposals could influence future negotiations, potentially easing sanctions and allowing more Russian crude into global markets.“Focus now shifts to Sunday’s virtual OPEC+ meeting, where officials are likely to uphold plans to pause output increases in early 2026 while reviewing long-term capacity strategies,” said Rahul Kalantri of Mehta Equities.

7. INR trend

The rupee continues to face pressure against the dollar, struggling near the 89.25 level amid persistent dollar strength and mixed foreign flows.“With no clear progress on the India–US trade deal and uncertainty still dominating sentiment, rupee weakness may continue toward the 90.00 mark. Immediate resistance for the rupee now stands at 89.20, while the bias remains firmly on the downside,” said Jateen Trivedi of LKP Securities.

8. FII–DII Flows

Foreign investors remained on the back foot, with FIIs recording net sales of Rs 3,672.27 crore on Friday. Domestic institutional investors provided support with net buying of Rs 3,993.71 crore. The trend in institutional flows will be key for near-term market direction.