WPI inflation to India-US trade deal: Top five triggers for Indian stock market this week

Stock market next week: Indian indices, the Sensex and Nifty 50, extended gains for a second straight session on Friday, December 12, led by positive global sentiment following the US Federal Reserve's rate cut. The Sensex climbed 450 points, or 0.53%, to close at 85,267.66, while the Nifty 50 advanced 148 points, or 0.57%, to settle at 26,046.95. Broader markets outperformed, with the BSE Midcap and Smallcap indices rising 1.14% and 0.65%, respectively.

Meanwhile, the total market capitalisation of BSE-listed companies increased to over ₹470 lakh crore from ₹466.6 lakh crore in the previous session, adding more than ₹3 lakh crore to investor wealth in a single trading session.

“Markets remained volatile and ended the week in negative territory amid mixed domestic and global cues. Sentiment stayed subdued through most of the week and weakened further as selling pressure intensified, though a late rebound in the final sessions helped limit the downside. Persistent foreign fund outflows and a sharp depreciation in the rupee weighed heavily on investor confidence. As a result, the Nifty slipped 139 points to close at 26,046, while the Sensex declined 445 points to end at 85,268,” said Ajit Mishra- SVP, Research, Religare Broking Ltd.

On the market outlook, Mishra recommended investors to stay selective and maintain a balanced approach amid ongoing currency volatility and mixed global cues.

“Large-cap exposure remains preferable, particularly in sectors such as private banking, automobiles, metals, and pharmaceuticals. Export-oriented stocks may continue to benefit from a weaker rupee, though IT could remain range-bound given correction in the US IT-heavy index, Nasdaq Composite. Caution is advised in mid and small caps as valuations remain elevated and liquidity support has moderated. Besides, traders should avoid chasing stocks facing negative news flow in anticipation of a rebound and wait for clear signs of stability before taking fresh exposure,” Mishra added.

Top triggers for the Indian stock market

WPI Inflation

Ministry of Commerce and Industry will be announcing WPI for the month of November, 2025 on December 15. Wholesale price inflation (WPI) eased to –1.21% in October, mainly due to falling prices of food items such as pulses and vegetables, along with declines in fuel and manufactured goods prices.

India-US trade deal

According to PTI report, India and the United States have agreed to maintain their constructive and forward-looking engagement following two days of discussions between an Indian delegation and a US team led by Deputy US Trade Representative Rick Switzer, PTI reported.

The two sides concluded the talks on Thursday, during which they exchanged perspectives on key trade matters, including ongoing negotiations aimed at finalising a mutually advantageous bilateral trade agreement.

Rupee Outlook

The rupee weakened by 17 paise to end Friday at a record low of 90.49 against the US dollar, as lingering uncertainty around the India–US trade agreement and continued foreign investor outflows weighed on market sentiment.

Forex market participants noted that the currency remains under pressure due to strong dollar demand from importers, driven by a sharp rise in global precious metal prices.

In the interbank forex market, the rupee opened at 90.43 per dollar before sliding to an all-time intraday low of 90.56, marking a 24-paise drop from the previous close. It eventually settled at 90.49, down 17 paise for the session.

FII Activity

Foreign portfolio investors (FPIs) have persistently sold Indian equities throughout 2025 and are on track to post the second-highest number of net selling days in any calendar year over the past 20 years.

So far this year, foreign institutional investors (FIIs) have been net sellers on 141 of the 234 trading sessions, a figure that is likely to surpass the 146 sell days recorded in 2022 and trails only 2008, when net selling peaked at 154 days during the global financial crisis.

Gold prices

Gold prices climbed 1% on Friday to touch a seven-week high, supported by a weaker dollar, growing expectations of interest rate cuts, and increased safe-haven buying amid geopolitical uncertainties. Silver, meanwhile, surged to a record high.

Spot gold rose 1% to $4,327.31 per ounce by 12:48 GMT, marking its highest level since October 21 and putting it on track for a weekly gain of 3.1%. U.S. gold futures also advanced, up 1.2% at $4,363.20 per ounce.

Technical Outlook

According to Mishra, Nifty has managed to reclaim the crucial short-term moving average (20 DEMA) near the 25,950 zone. “Sustained holding above this level will be critical for extending the recovery toward the record high of 26,300, with further upside potential toward 26,550. Failure to maintain this support could lead to a retest of the previous swing low near 25,700, followed by the major support around 25,400, which coincides with the 100 DEMA,” he said.

Meanwhile, on the Bank Nifty outlook, Mishra added, “The banking index continues to display relative strength and is holding above its short-term moving average. The 58,400–58,800 zone remains a key support area, and a breakdown below this could trigger fresh pressure toward 57,600. On the upside, the 60,000–60,500 zone is the immediate resistance, and a decisive breakout could pave the way for renewed momentum.”

Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.