Why the markets fell this week and bounced back today
Bathini noted that the Nifty briefly dipped below 26,000 mid-week but found strong support around 25,850, triggering a recovery. However, global signals remained unsupportive for most of the week. Friday’s rebound was driven by positive Asian markets and improved global sentiment, he said, although the index still failed to decisively regain the 26,000 mark.
FII selling continues, but markets are showing resilience
Foreign Portfolio Investors (FPIs) remain net sellers, especially towards the end of the year.
“November and December are usually when profits are booked by the FPI. At the end of the calendar year, they tend to close their positions,” Bathini said. He pointed out that FPIs sold nearly ₹3 lakh crore last fiscal and around ₹2.95 lakh crore so far this year, but the markets have avoided any major correction.”This reflects the maturity of Indian markets. Domestic institutional investors and private equity have emerged as strong liquidity providers,” he added.
US CPI data: Short-term relief, long-term clarity expected
On the softer-than-expected US CPI print of 2.7%, Bathini said markets were somewhat optimistic, but clarity on the Federal Reserve’s interest rate trajectory will only emerge in the next few policy meetings.
He also flagged concerns about US tariff risks, prolonged shutdown effects and their impact on consumption and inflation trends.
“The data provided temporary relief, but markets need confirmation through upcoming economic data,” he said.
Rupee devaluation a major concern
One of the biggest nuisances for FPIs remains the sharp depreciation of the rupee, which recently touched $91 against the dollar.“Currency weakness and uncertainty around global trade deals continue to keep foreign investors cautious,” Bathini noted.
Key data points to watch in December
As global markets head into a holiday season, Bathini says FPI flows and currency movements will be the most critical variables to watch in the coming weeks.
On the domestic front, he highlighted recent policy reforms, including:
- Reforms in the insurance sector
- Approval of the Nuclear Energy Law, which opens up long-term energy opportunities
“India’s energy demand will rise sharply on the back of data centres, semiconductors and digital infrastructure. Nuclear energy is an emerging long-term theme,” he said.
Sectors to keep an eye on
Bathini identified the following sectors as potential opportunities:
- Infrastructure – attractive valuations in view of higher investments in FY26-27
- Defense – after a healthy correction and consolidation
- Nuclear energy – an emerging, underexposed theme
- Semiconductors and data centers
- Banking and financial services – still the main driving forces behind the Indian markets
Market outlook and key levels
In the short term, Bathini expects the markets to remain within a certain range.
- Resistance: 26,000–26,250 on Nifty
- Support: About 25,850
“A decisive break above 26,250 is needed for new upside potential. Until then, it’s a buy-on-dip, sell-on-rally market,” he said.
(Disclaimer: Recommendations, suggestions, views and opinions expressed by the experts/brokers do not represent the views of Economic Times.)
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