Strong push of soft rates

Hopes of cheaper credit in India and the US and cooling crude propel large- and mid-caps to record highs

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Key equity indices gained over 1% in two straight sessions to record closing highs on 27 November. A quarter percentage point lending rate cut is widely expected due to repeated downside surprises in domestic headline inflation. India's central bank announced relief measures to support exporters hit by recent tariff disruptions.

The International Monetary Fund's (IMF) upbeat assessment about India's growth outlook in FY 2026 cheered the market.

Sentiment also improved on strengthening prospects of a rate cut by the US Federal Reserve.

Crude oil prices eased 3% to US$62.32 barrel in the 15 days to 28 November. The Indian currency strengthened 0.8% in the fortnight.

Return of overseas stock investors lifted the mood. They bought a net Rs 7,000 crore of equity in the cash market in the two weeks to 28 November. They net invested slightly over Rs 7,000 crore in the entire month.

The Q2 earnings weakness also appeared to be bottoming out, adding to the positive tone. Services activity strengthened in October as compared with the previous month. The Nifty 50 index scaled to 26,215.55 and the S&P BSE Sensex climbed to 85,720.38 on 27 November.

Both the benchmarks ended the fortnight marginally off. The Nifty closed above 26,200 and the Sensex above 85,700 on 28 November, supported by strength in banking and financial stocks and pharm and auto counters. The Bank Nifty, Nifty Financial Services, Nifty Auto and Nifty Pharma indices spurted to new peaks on 28 November.

In the broader market, the Nifty Midcap100 jumped 1.6% to a record high of 61,0617.7 in two consecutive sessions to 27 November before coming off and ending at 61,043.25 on 28 November. The Nifty Small-cap 100 index climbed 1.5% to 17,829.25 in two straight sessions to 26 November.