Trade Setup: Can Nifty Reclaim 25,000 Amid Market Rally? What Trends Suggest Ahead Of RBI Policy Outcome!

Indian markets extended their recovery in a volatile trading session on Thursday, with the Nifty gaining over 1% to close at its highest level since October 21. A sudden surge in heavyweight stocks mid-session boosted sentiment, though volatility in the final hour tempered momentum. Ultimately, the Nifty settled at 24,708.40, a gain of 0.98%, after touching an intraday high of 24,857.75.

The market rally was broad-based, with IT, banking, and auto sectors leading the charge. The IT index hit a record high, surging over 2%, driven by strong performances from Infosys and TCS. The Nifty Bank index gained 0.63%, closing at 53,603.55, just 864 points shy of its 52-week high of 54,467.35.

The IT sector emerged as the top gainer, with robust buying interest lifting the index to a record high. Banking stocks also delivered strong gains, contributing significantly to the index's rise. Broader market participation remains essential for sustaining this momentum, as analysts closely watch sectoral rotations in the coming sessions.

Market volatility was largely influenced by investor caution ahead of the Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) meeting. Speculation about potential liquidity measures by the central bank following a dip in economic growth added to the uncertain environment.

Shares of Bajaj Auto declined despite the company's clarification on recent pricing changes in its Freedom 125 Bike portfolio. A UBS report highlighted that prices for select variants had been reduced post-Diwali, with cuts of Rs 5,000 for entry-level models and Rs 10,000 for mid-level variants. Bajaj Auto countered the report, stating it did not present a full or accurate picture. Despite the clarification, investor sentiment remained subdued.

Stocks to Watch for Friday
Afcons Infrastructure: Achieved a milestone by completing the longest tunnelling drive for Delhi Metro Rail Corporation's Phase-4 project.
Nykaa: CEO Nihir Parikh announced his resignation, effective December 5, 2024.
Cummins India: CFO Ajay Shriram Patil to step down on January 9, 2025.
Dr Reddy's Laboratories: Its Kazakhstan arm received a penalty order for disallowance of certain expenses for CY2021, amounting to approximately Rs 28.7 lakh.
Ola Electric: Received additional communication from the Central Consumer Protection Authority (CCPA) seeking further documents and information, with a response deadline of 15 days.
Ramco Systems: Partnered with Hanjin Information Systems & Telecommunication to drive digital transformation in Korean aviation's M&E and MRO sectors.

Global Markets Overview
Wall Street
US markets showed mixed trends as investors awaited November's jobs report, which could influence the Federal Reserve's December rate decision. Dow Jones futures dipped slightly, while S&P 500 and Nasdaq 100 futures edged down 0.1%.

On Thursday, the S&P 500 closed 0.7% higher for the week, while the Nasdaq Composite surged 2.5%. The Dow Jones, however, declined 0.3% week-to-date. Tech stocks remained in focus, with Ulta Beauty jumping 12% after outperforming quarterly earnings expectations. GitLab and Docusign also posted strong gains of 7% and 14%, respectively.

US Treasury yields showed mixed movement. The 10-year yield slightly dipped to 4.178%, while the 2-year yield rose 2 basis points to 4.142%, reflecting investor caution ahead of key economic data.

European Markets
European stocks ended higher on Thursday, maintaining a five-session positive streak. The regional Stoxx 600 rose 0.43%, driven by gains in banking and travel stocks. France's CAC 40 index gained 0.4%, buoyed by a stronger euro, despite political turmoil following Prime Minister Michel Barnier's ousting.

Asia-Pacific Markets
Asian markets delivered a mixed performance. Political instability in South Korea weighed on the Kospi, which fell 0.90%. In Australia, the S&P/ASX 200 gained 0.1%. The Nikkei 225 rose 0.30%, while the Topix edged up 0.06%. The Hang Seng index dropped 1.1%, and the CSI 300 lost 0.23%.

Oil Prices
Oil prices slipped in early Asian trading on Friday amid weak demand concerns. Brent crude futures edged down by 0.1% to $72 per barrel, while West Texas Intermediate (WTI) crude fell to $68.27 per barrel. For the week, Brent was on track for a 1% drop, while WTI maintained a marginal gain of 0.1%.

The Nifty's strong recovery on Thursday has set a positive tone, but sustaining the rally will depend on broader sectoral participation and external cues, including global markets and crude oil prices. Investors will also be closely monitoring the US jobs report and its implications for Federal Reserve policy.

With foreign institutional investors (FIIs) remaining net buyers and domestic institutions as net sellers, market dynamics are expected to remain volatile. Key levels for the Nifty include support at 24,295 and resistance near 24,857. Market watchers anticipate that a breach of these levels could dictate the next directional move.