SPX: Up modestly with VIX falling, confirming a constructive risk‑on tone; bias is to buy dips rather than chase gaps.
DJI: Stronger than SPX, showing rotation into industrials and value; positive for cyclicals and export‑linked Indian names into Monday.
NDX: Small gain despite higher yields, suggesting large‑cap tech is consolidating not correcting; treat weakness as tactical, not structural, unless yields spike further.
CAC40: Mild green reflects steady but unspectacular European sentiment; no strong lead from France but it supports global risk.
DAX: Fractionally negative, hinting at some pressure on European cyclicals/Autos; avoid aggressive longs in Germany‑linked exporters on Monday.
DXY: Dollar edging higher with risk‑on equities signals relative US strength; watch for pressure on EM FX if this trend extends.
FTSE: Modest gain with firm DXY suggests UK stocks are riding global risk appetite; commodity majors may lend support.
NI225: Big outperformance, pointing to strong Japan risk appetite and likely follow‑through in Asian session; positive for global equities at Monday’s open.
US05Y: Rising short‑end yield implies markets are still discounting “higher for longer”; negative for long‑duration growth and richly valued stories.
US10Y: Benchmark yield creeping up reinforces that any equity rally must coexist with tighter financial conditions; cap upside for high‑PE tech.
VIX: Drop below recent highs confirms short‑term complacency; good for intraday longs but time to consider hedges rather than selling options naked.
Indian sector indices
Symbol
Index
Last
Chg
Chg%
CNXFMC
Nifty FMCG
54,949.10
−441.85
−0.80%
CNXPSU
Nifty PSU Bank
8,253.20
−261.70
−3.07%
NIFTY_M
Nifty Midcap
13,844.00
−146.50
−1.05%
CNXFIN
Nifty Financial Services
27,629.60
64.35
0.23%
CNXIT
Nifty IT
37,825.25
284.00
0.76%
CNXAUTO
Nifty Auto
27,643.80
−335.70
−1.20%
CNXENE
Nifty Energy
35,105.00
−354.40
−1.00%
CNXINFRA
Nifty Infrastructure
9,509.50
−78.45
−0.82%
CNXMET
Nifty Metal
10,265.20
−50.65
−0.49%
CNXPHAR
Nifty Pharma
22,907.85
2.85
0.01%
CNXREA
Nifty Realty
885.35
−6.70
−0.75%
CNXMED
Nifty Media
1,462.55
3.65
0.25%
CNXFMC: Defensive FMCG is correcting, suggesting profit‑booking where valuations are rich; dip‑buy only near strong weekly support.
CNXPSU: Sharp 3% selloff in PSU banks shows clear risk‑off after a strong run; avoid fresh longs, look only for oversold intraday bounces.
NIFTY_M: Midcaps underperform, indicating risk appetite is moving out of crowded beta; for Monday keep midcap exposure light and tightly hedged.
CNXFIN: Financials still positive, showing resilience in private banks and NBFCs; this supports headline Nifty levels despite midcap pressure.
CNXIT: IT outperformance signals market preference for export‑earning defensives with decent earnings visibility; good long candidates on dips.
CNXAUTO: Autos reversing suggests caution on consumption cyclicals; stick to leaders with strong order books rather than broad basket buying.
CNXENE: Energy weakness hints at profit‑taking in OMCs/power; Monday trades should focus on relative strength names only.
CNXINFRA: Infra soft with rates higher, reflecting duration and execution risk; avoid leveraged infra plays if yields keep rising.
CNXMET: Metals only mildly down despite firm dollar, implying underlying demand still okay; use Monday dips for staggered entries rather than panic exits.
CNXPHAR: Pharma flat but green; sector is acting as a quiet defensive, accumulate high‑quality names slowly.
CNXREA: Realty pulling back with yields up; high‑beta, rate‑sensitive space to avoid unless there is clear intraday reversal.
CNXMED: Media small bounce after prior declines; treat as trading only, not positional, until trend structure improves.
Upcoming / open IPOs
(Only core trading‑relevant fields shown.)
Company
Issue Open
Issue Close
Lot Size
Helloji Holidays
02 Dec 25
04 Dec 25
1200
Neochem Bio Solutions
02 Dec 25
04 Dec 25
1200
Shri Kanha Stainless
03 Dec 25
05 Dec 25
1600
Meesho
03 Dec 25
05 Dec 25
135
Aequs
03 Dec 25
05 Dec 25
120
Vidya Wires
03 Dec 25
05 Dec 25
288
Western Overseas Study Abroad
04 Dec 25
08 Dec 25
2000
Luxury Time
04 Dec 25
08 Dec 25
1600
Methodhub Software
05 Dec 25
09 Dec 25
600
Encompass Design
05 Dec 25
09 Dec 25
1200
Flywings Simulator Training
05 Dec 25
09 Dec 25
600
SME/traditional names (Helloji, Neochem, Shri Kanha, Aequs, Vidya Wires, Western Overseas, Luxury Time, Encompass, Flywings): Clustered openings show strong primary‑market pipeline; expect liquidity diversion from secondary smallcaps during subscription days.
New‑age/tech (Meesho, Methodhub Software): Sentiment toward tech IPOs will act as a barometer of risk appetite; strong oversubscription can spill over to listed internet/IT midcaps on Monday and listing days.
IPOs listing soon
Company
Listing Date
Allotment Date
Issue Size (Cr)
Issue Price (₹)
Logiciel Solutions
05 Dec 25
03 Dec 25
39.9
193
Purple Wave Infocom
05 Dec 25
03 Dec 25
31.4
126
Exato Technologies
05 Dec 25
03 Dec 25
37.5
140
Astron Multigrain
08 Dec 25
04 Dec 25
18.4
63
Speb Adhesives
08 Dec 25
04 Dec 25
33.7
56
Invicta Diagnostic
08 Dec 25
04 Dec 25
28.1
85
Ravelcare
08 Dec 25
04 Dec 25
24.1
130
Clear Secured Services
08 Dec 25
04 Dec 25
85.6
132
Logiciel / Purple Wave / Exato: IT–services/information‑tech listings on the same day can create short‑term froth; watch for listing‑day premiums bleeding back into listed mid‑IT names.
Astron / Speb / Ravelcare / Invicta / Clear Secured: Mix of agri, specialty chemical, healthcare and services; strong debuts here will support broader SME sentiment and keep smallcap valuations rich.
Overnight futures, FX, crypto
Global index futures
Symbol
Last
Chg
Chg%
US500
6,848.0
−5.3
−0.08%
US30
47,908.0
−70.0
−0.15%
NAS100
25,585.4
−21.4
−0.08%
FCE1!
8,098.0
12.0
0.15%
FDAX1!
23,829.0
121.0
0.51%
FESX1!
5,732.0
33.0
0.58%
399106
2,441.2673
0.2950
0.01%
HSI
25,815.64
54.90
0.21%
J225
50,537.3
688.9
1.38%
XJO
8,606.2
11.0
0.13%
KOSPI
3,992.23
−44.07
−1.09%
IRUS
2,651.71
−15.49
−0.58%
MZNPI
29,250.05
−229.24
−0.78%
Forex
Pair
Last
Chg
Chg%
EURUSD
1.16554
−0.00155
−0.13%
GBPUSD
1.3338
−0.00236
−0.18%
USDJPY
155.499
0.286
0.18%
USDINR
90.4025
0.2565
0.28%
Crypto
Symbol
Last
Chg
Chg%
BTCUSD
93,526.55
72.71
0.08%
ETHUSD
3,210.3
21.1
0.66%
DOGUSD
0.1512
−0.0005
−0.33%
LTCUSD
86.19
0.36
0.42%
SOLANA
144.52
−0.98
−0.67%
US500 / US30 / NAS100: Slight red after previous rally points to mild profit‑taking, not trend change; Monday bias is sideways to slightly down unless macro surprises.
FCE1! / FDAX1! / FESX1!: Europe futures green, suggesting catch‑up risk‑on; positive read‑through for early European session and for Indian open as global cue.
399106 / HSI / XJO: Asia ex‑Japan mostly flat‑positive, implying no fresh regional shock; good backdrop for Nifty if domestic flows cooperate.
J225: Japan again the standout gainer; strong global risk/barbell in Japan vs EM could continue, so don’t over‑weight India vs Nikkei in pairs.
KOSPI / IRUS / MZNPI: Korea and some EM futures weak, warning of select risk‑off pockets; be cautious on high‑beta EM proxies (metals, smallcaps).
EURUSD & GBPUSD: Dollar gaining vs euro and pound; negative for commodities and EM currencies if the move extends.
USDJPY & USDINR: Both pairs higher, showing dollar demand; Monday carry trades should be sized smaller and hedged.
BTCUSD / ETHUSD: Majors slightly up, showing quiet constructive crypto tone; not a driver for equities but indicates risk appetite intact.
DOGUSD / SOLANA: Some altcoins soft, suggesting rotation within crypto; avoid chasing high‑beta alts if equity volatility rises.
Indian Stock Heat‑Map (what’s happening, gainers/losers, 52‑week, volume)
This panel is more qualitative; key trading‑relevant symbols:
News flow: JSW Steel, NTPC.
Top gainers: BSOFT, DOMS, IDEA, SONATSOFTW, TRITURBINE.
Top losers: INDIANB, WOCKPHARMA, ANGELONE, OLAELEC, HUDCO.
New 52‑week high: CANFINHOME, POWERINDIA, VEDL, ECLERX, ASIANPAINT.
New 52‑week low: OLAELEC, JYOTHYLAB, COLPAL, FINCABLES, CROMPTON.
JSW Steel, NTPC: Positive corporate/target news could drive sector beta; look for follow‑through in metals and utilities.
Gainer basket: Momentum longs possible in BSOFT, DOMS, IDEA, SONATSOFTW, TRITURBINE, but only on continuation patterns with tight stops as many are mid/small caps.
Loser basket: INDIANB, WOCKPHARMA, ANGELONE, OLAELEC, HUDCO signal stress; avoid knife‑catching unless there is news‑based reversal.
52‑week highs: CANFINHOME, POWERINDIA, VEDL, ECLERX, ASIANPAINT sit in strong up‑trends; these are trend‑following candidates, but risk of mean‑reversion is high if Nifty corrects.
52‑week lows: OLAELEC, JYOTHYLAB, COLPAL, FINCABLES, CROMPTON are in structural down‑trends; better avoided for fresh longs.
Outperformers vs Nifty500: ZFCVINDIA, ECLERX, WOCKPHARMA, BSOFT, ASHOKLEY show relative strength; use them for long‑only or long‑leg in pair trades.
Underperformers: WHIRLPOOL, TARIL, ANANTRAJ, KAYNES, INDIANB can be short candidates or avoided on rallies.
Volume shockers: IDEA, MAHABANK, SAGILITY, CANBK, OLAELEC show institutional/prop interest; monitor for second‑day breakouts or reversals.
Additional volume and delivery analytics
Key groups:
High volume, high gain: IDEA, SAGILITY, WIPRO, INFY, INDUSTOWER.
High volume, top losers: MAHABANK, CANBK, OLAELEC, PNB, VMM.
Rising delivery %: EIHOTEL, VIJAYA, STARHEALTH, INDIA MART, JYOTHYLAB.
High volume/high gain: Strong accumulation with price confirmation; IDEA and large IT names (WIPRO, INFY) look good for momentum continuation trades on Monday.
High volume/losers: Distribution zone in MAHABANK, CANBK, OLAELEC, PNB, VMM; treat rallies as opportunities to lighten or short.
Rising delivery %: EIHOTEL, VIJAYA, STARHEALTH, INDIAMART, JYOTHYLAB show investment‑style buying; suitable for swing trades with wider stops.
Broker upgrades: MARUTI, NAVINFLUOR, AMBUJACEM, LEMONTREE, ASIANPAINT have positive fundamental catalysts; buy‑on‑dips setups are favored as long as indices hold support.
FII / DII flow heat‑map
Headline data (₹ Cr):
Last 30 Days: FII net −25,520.8; DII net +89,019.3.
Last 2 Weeks: FII net −13,162.3; DII net +38,684.0.
Last 1 Week: FII net −13,071.4; DII net +20,024.6.
Recent daily prints show persistent FII selling and consistent DII buying with only brief FII positive days.
Takeaway
FIIs are consistently selling while domestic institutions are strongly supporting the market; this explains resilience in Nifty despite global yield pressure.
For Monday, respect that rallies are DII‑driven and can fade quickly if local flows slow; avoid getting excessively long when FIIs are heavy sellers intraday.
COMEX and Indian indices
COMEX and energy
Symbol
Asset
Last
Chg
Chg%
GOLD1
Gold futures
130,285
−177
−0.14%
SILVER1
Silver futures
182,317
−35
−0.02%
CRUDEOIL
Crude Oil futures
5,361
5
0.09%
NATURAL
Natural Gas futures
451.7
1.7
0.38%
XAUUSD
Spot Gold
4,192.160
−10.955
−0.26%
SILVER
Spot Silver
58.1040
−0.3640
−0.62%
BRENT
Brent Crude
62.395
−0.150
−0.19%
XTIUSD
WTI Crude
59.26
0.11
0.19%
NATGAS
US Nat Gas
4.850
−0.013
−0.27%
Indian Indices
Symbol
Index
Last
Chg
Chg%
INDIA VIX
India VIX
11.2125
−0.0150
−0.13%
NIFTY1
Nifty 50 Fut (near)
26,067.0
−68.0
−0.26%
SENSEX
Sensex
85,106.81
−31.46
−0.06%
NIFTY
Nifty 50
25,986.00
−46.40
−0.18%
BANKNII
Bank Nifty Fut 1
59,348.25
74.45
0.13%
NIFTY1
26,136.20
−76.80
−0.29%
BANKNII
59,737.00
71.02
0.12%
FINNIFT
Nifty Financial Services Fut
27,813.60
50.40
0.18%
MIDCPNI
Nifty Midcap
13,900.05
−132.70
−0.95%
Takeaways
Gold/silver: Mildly red despite higher yields, suggesting consolidation rather than breakdown; keep hedge longs but don’t add aggressively.
Crude & gas: Oil flat, gas slightly higher; no big macro shock from energy, so equity focus remains on rates and flows.
INDIA VIX: Very low and easing, implying complacent domestic sentiment; good for options selling but risk of volatility spike around data is high.
NIFTY / SENSEX: Small red candles after a strong run, consistent with a healthy pullback; Monday should be traded with buy‑on‑dip bias near support.
BANKNIFTY / FINNIFT: Financials leading slightly, indicating domestic banks remain the main pillar; favorable for pair trades long Bank Nifty vs short Nifty Midcap.
MIDCPNI: Nearly 1% down shows ongoing midcap de‑rating; be selective and avoid over‑leveraged small/mid caps.
Segment‑Wise Summaries (Technical + Fundamental + Macro)
Global indices & rates: US and Japan indices are strong with VIX low, while European indices are mildly positive and US yields grind higher. Technically this is a late‑stage uptrend with rising rates acting as a ceiling; fundamentally earnings are stable but valuations in US tech and Japan are rich, so any macro shock (US data, Fed commentary) can trigger a sharp but likely buyable correction. Economic focus today is on US yields and dollar strength, which will dictate EM risk appetite.
Indian sector indices & domestic benchmarks: Nifty and Sensex are in a shallow correction while Bank Nifty and IT show relative strength, contrasted by weakness in PSU banks, autos, energy and midcaps. This suggests market leadership is rotating toward quality private financials and export‑earnings defensives, while crowded pockets in PSU and midcaps are seeing de‑risking. With India VIX low and DIIs absorbing FII selling, dips toward key supports are more likely to attract buyers than start a bear trend.
Primary market (IPOs): A heavy pipeline of SME and tech/IT IPOs, plus multiple listings over the next week, indicates strong primary‑market sentiment and risk appetite in small/mid‑cap space. Technically, this often coincides with stretched valuations and intermittent volatility in comparable listed names as funds rotate to new issues. For trading today, listing and subscription days can create sectoral spikes (IT, chemicals, healthcare), but liquidity drift away from secondary market needs to be factored into intraday volumes.
Single‑stock heat‑maps and breadth: The mix of top gainers, losers, 52‑week highs/lows, relative performers and volume shockers shows narrow but strong leadership in select financials, IT, housing finance and telecom, while PSUs, some pharma, and consumer names underperform. Technically this is a classic late‑cycle breadth deterioration: indices hold up due to a handful of heavyweights while broader market weakens. Any negative macro trigger could widen the correction quickly, so stock selection and relative‑strength focus are critical.
Flows (FII/DII) and macro commodities: Persistent FII selling offset by strong DII buying underpins the index but leaves it vulnerable if domestic flows slow. Commodities are quiet with gold consolidating and crude flat, so the dominant macro risk remains global yields and the dollar. This backdrop favors sectors less sensitive to external funding (domestic banks, IT with natural hedges) and argues for caution in leverage‑heavy or import‑sensitive themes.
Per key Index/Segment
SPX / DJI / NDX / NI225: Use as global risk gauge; if these hold gains overnight, bias Monday Nifty and Bank Nifty to gap mildly up and respect previous swing lows as stop levels.
DXY / EURUSD / GBPUSD / USDJPY / USDINR: Rising dollar and USDINR mean currency risk is creeping in; avoid large unhedged positions in FX‑sensitive sectors (metals, IT exporters) without checking levels.
US05Y / US10Y & India VIX: Higher yields with low vol is a “grind‑up” environment; favor options spreads (bull call/bear put) over naked calls, and avoid very long‑dated leveraged longs.
NIFTY / BANKNIFTY / FINNIFT / MIDCPNI: Trade a barbell—long Bank Nifty and quality large caps, short or underweight midcap index; on Monday, buy Bank Nifty near intraday supports while selling midcap rallies.
CNXIT & global IT (Meesho, Methodhub, listing IT IPOs, WIPRO, INFY): IT is in relative‑strength phase; combine technical levels (20/50‑DMA) with IPO sentiment to build long ideas, but avoid names where IPO euphoria looks over‑extended.
CNXPSU, PSU banks (MAHABANK, CANBK, INDIANB): Clear de‑risking zone; for Monday treat them as short‑on‑rise candidates, and avoid fresh positional longs until FII selling eases.
High‑volume/high‑gain names (IDEA, SAGILITY, BSOFT, DOMS, TRITURBINE, etc.): Good intraday long candidates if they open above previous day’s VWAP and hold; trail stops aggressively because they are trader‑driven.
High‑volume losers / underperformers (WHIRLPOOL, KAYNES, MAHABANK, OLAELEC): Use for short setups on weak bounces; combine with broader sector weakness (midcaps, PSU).
52‑week‑high leaders (CANFINHOME, POWERINDIA, ECLERX, ASIANPAINT): Suitable for trend‑following; on Monday wait for early dip or consolidation before entering, with stops just below recent swing lows.
Gold/silver and crude: Use as macro hedges—if US yields spike and equities wobble, gold longs can cushion the book; if crude unexpectedly breaks out, cut exposure in OMCs and fuel‑sensitive sectors.
Risk‑management guidance
Keep gross exposure slightly below normal because indices are near highs with narrowing breadth and FII selling.
Focus on relative‑strength and relative‑weakness pairs rather than outright index bets (e.g., long Bank Nifty vs short Midcap, long IT vs short PSU).
Size intraday positions based on VIX and India VIX—low vol justifies smaller targets but not oversized leverage, because any surprise can cause outsized gaps.
For 4 December 2025, the key scheduled and thematic events that can move markets in the US, Eurozone and India are:
United States
Challenger Job‑Cuts and weekly Initial Jobless Claims are due, giving a timely read on labour‑market cooling or resilience; softer‑than‑expected layoffs and low claims typically support risk assets and raise odds of “higher for longer” rates, while any surprise spike would favour bonds and hurt cyclicals.
The US trade balance release for October (exports, imports and overall deficit) is also on the docket; a wider deficit with weak exports would reinforce global‑growth concerns and pressure the dollar, whereas stronger exports and contained imports would support the “soft‑landing” narrative and keep the dollar bid.
Eurozone
Euro‑area data in this week’s window centres on October retail‑sales figures and final PMI prints, which together show whether the consumer is stabilising after a weak stretch; a downside retail surprise or PMIs below the 50 line would weigh on European cyclicals and banks, while resilience would help DAX/CAC and support risk sentiment globally.
Eurostat is also scheduled to publish a quarterly GDP and employment update around this date, and several ECB speakers (including senior officials) are on the calendar; any guidance that rates will stay restrictive despite weak growth would be negative for peripherals and high‑beta equities, while hints of earlier easing would be bullish for European indices and EM risk.
India
Domestically, no major high‑frequency data release is fixed exactly for 4 December, but markets are reacting to very strong recent PMI readings (services near 60, manufacturing still in solid expansion) and to multilateral forecasts such as the OECD and IMF retaining India’s medium‑term GDP growth around 6.5–6.7% with inflation well within the RBI band; this macro backdrop supports valuations in banks, infra and consumption.
In addition, commentary around India’s fiscal path and upcoming Union Budget, including discussion of a fiscal‑deficit target near the mid‑4% of GDP region and robust GST collections, keeps focus on bond yields and PSU/banking names; any signal of looser fiscal stance could lift growth‑sensitive stocks but pressure bonds and rate‑sensitive sectors, while a tighter path would do the opposite.
For 4 December 2025, India does not have a big “headline” print like GDP, CPI or RBI policy, but markets will still track a few macro items and the recent data around them to set expectations.
Scheduled India releases on 4 Dec
From the India‑specific economic calendar, there are no major top‑tier data points listed exactly on 4 December; key domestic numbers in this window are clustered on surrounding days (services PMI on 2–3 Dec and RBI policy plus current account and manufacturing production on 5 Dec).
For trading on 4 Dec, this means local price action will be driven mainly by global data (US/Euro events), flows (FII/DII), and positioning ahead of the 5 December RBI policy and macro releases rather than by fresh India data that morning.
Recent India data to anchor expectations
The HSBC India Services PMI for November was just reported near 59.5–59.8, well above 50 and only slightly below consensus, signalling strong domestic demand and easing price pressures; markets will assume this strength continues into early December unless contradicted by new information.
Official commentary and multilateral assessments put India’s GDP growth in the 6.5–8.2% range with inflation comfortably inside the RBI band, so on 4 Dec traders will generally price a “strong‑growth, controlled‑inflation” narrative and focus on how the coming RBI decision and global yields interact with this backdrop.
RBI’s December 5 policy is widely seen as a close call between a 25 bps cut (to 5.25%) and a status‑quo at 5.50%, with consensus slightly tilted to “no change but dovish commentary”. Overall game‑plan: treat 10:00–10:30 as event‑risk time, trade lighter size into the announcement, and use post‑policy trend rather than pre‑policy guesses to size up.
What is priced in?
Repo rate has already been cut by 100 bps in 2025 to 5.5%, while inflation has dropped to around 0.25–2.6% and FY26 growth projections have been upgraded toward 6.8–8.2%, giving RBI room but not compulsion to cut again.
Polls show a split: many economists and some brokers expect a 25 bps cut, but several big banks (e.g., Bank of Baroda) and previews argue for a pause with neutral stance, so any outcome will disappoint part of the market and create volatility.
How Nifty / Bank Nifty typically react
Historically, when RBI surprises with a cut (e.g., June 2025’s larger‑than‑expected easing), Nifty and Bank Nifty have spiked 1% intraday with strong rallies in banks, autos, realty and NBFCs.
When RBI keeps rates unchanged in line with expectations, price reaction is often muted or mildly negative, with rate‑sensitives (realty, autos) and PSU banks underperforming even if commentary is constructive.
Scenario plan and trade ideas
1) Base case: Repo unchanged at 5.50%, neutral / mildly dovish tone
Likely reaction: Initial whipsaw (knee‑jerk sell in rate‑sensitives as “no cut disappointment”), then stabilisation if growth and inflation projections stay strong and RBI hints at future space to cut.
Nifty 50 / Sensex: Avoid large positions pre‑event; post‑speech, buy on dip if index holds just below recent swing support (e.g., previous day’s low) with target of mean‑reversion to day’s VWAP.
Bank Nifty: Private banks should outperform PSU; look for “V‑shape” recovery if first 15‑minute low holds and RBI reassures on liquidity and credit growth.
Sector stance:
Overweight: large private banks, IT (benefits from stable rates + global growth), quality consumption.
Underweight: high‑beta PSU banks, leveraged realty and small NBFCs.
2) Bull case: 25 bps cut to 5.25% with dovish guidance
Likely reaction: Fast spike in Bank Nifty, Realty, Autos and mid/small caps; INR could weaken slightly but equities cheer cheaper funding.
Trading approach:
Pre‑event: Very small “lottery ticket” long via call spreads or limited‑risk options, not large futures.
Post‑event: If cut confirmed and Nifty breaks above immediate resistance with strong breadth, chase via Bank Nifty futures and rate‑sensitive sector indices, but book partial profits by EOD as first reaction rallies often fade next day.
Risk: If market had already front‑run the cut, you can get “sell the news” even on positive surprise; watch first 5‑minute candle for exhaustion.
3) Hawkish surprise: No cut and commentary emphasises external risks / imported inflation
Likely reaction: Nifty and Bank Nifty sell off; yields back up, INR firms; realty, autos, PSU banks and smaller NBFCs underperform sharply.
Trading approach:
Use any spike higher in first 5–10 minutes to build small shorts in Nifty / Bank Nifty and rate‑sensitives with stops just above policy‑day high.
Rotate to defensives: IT, FMCG, healthcare and export‑oriented large caps.
Risk: If global cues stay strong, downside may be limited to 0.5–1%; avoid over‑sizing shorts expecting a full trend reversal.
Practical intraday rules for Dec 5
Cut position size to 50–60% of normal from 9:45 to 10:30; widen stops slightly but keep max loss per trade fixed.
Pre‑policy bias should be dominated by global cues (US futures, DXY, US yields) and local FII/DII flows from the previous two sessions, not by trying to “predict” RBI.
Use first 15–30 minutes after the announcement to map structure: if both price and breadth (adv/decline, banking/realty indices) line up with one scenario, only then add size in direction of trend.
Options: Prefer defined‑risk structures like straddles/strangles entered on previous close and partially unwound into the volatility spike, or directional spreads (bull call / bear put) established once direction is clear.
Avoid fresh positional trades in small/midcaps purely on rate view; use them only where stock‑specific fundamentals are strong and leverage is low, because RBI days often move mainly the large liquid indices.
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