Western markets ended higher on Friday, but US futures are in the red this morning. Except for China, most Asian markets slipped on the first trading day of December. These are the factors holding back an Indian market eager to charge ahead on the back of stronger-than-expected GDP numbers. Even so, early trade may attempt to shrug off the negatives.
The big question for the market is whether the Reserve Bank will cut rates on Wednesday. Some worry the Monetary Policy Committee may decide there is no need for a rate cut given the strong GDP print. Although headline inflation has eased, core inflation—excluding fuel and food—remains elevated and could weigh on the committee’s decision.
Commodity markets saw a sharp rally in precious and industrial metals on Friday following a major technical outage. Crude oil is up more than 1 percent this morning. Cryptocurrencies, however, are sliding.
In GIFT City, Nifty derivatives closed at 26,516.00 on Friday night and climbed to 26,535 this morning, signalling a strong opening for Indian markets today.
European equities ended with small gains on Friday. German food delivery firm Delivery Hero jumped 14 percent on reports it may sell its overseas units.
US markets closed moderately higher on Friday, rounding off November on a strong note and setting the tone for an upbeat start to December. Last week, the Dow gained 3.2 percent, the S&P 500 rose 3.7 percent, and the Nasdaq climbed 4.9 percent.
On Friday, the Dow Jones added 289.30 points (0.61 percent) to 47,716.42; the S&P 500 advanced 36.48 points (0.54 percent) to 6849.09; and the Nasdaq Composite rose 151.00 points (0.65 percent) to 23,365.69.
US futures are lower this morning, with the Dow falling 0.30 percent, the S&P 0.48 percent, and the Nasdaq 0.66 percent.
Asian markets are trading lower. Japan’s Nikkei has dropped 1.70 percent. Australia is down 0.30 percent, and South Korea’s Kospi has fallen 0.70 percent. Hong Kong is up 0.80 percent, and China is higher by 0.30 percent.
China’s factory activity for November contracted, with the PMI falling to 49.9.
After hitting fresh records on Thursday, Indian markets were subdued on Friday. Foreign investors doubled their selling, though indices managed to avoid steep losses. Persistent FPI selling could push the market lower.
On Friday, the Sensex oscillated within a 440-point range and the Nifty within a 108-point band. Apart from pharma, healthcare, media, and oil, most sectors saw mild swings.
FPIs sold shares worth ₹3,795.72 crore, while domestic funds bought ₹4,148.48 crore.
Oil & gas, realty, IT, and financials declined. Pharma, healthcare, media and FMCG gained.
Sensex closed 13.71 points (0.02 percent) lower at 85,706.67; Nifty ended 12.60 points (0.05 percent) down at 26,202.95. Bank Nifty gained 15.40 points (0.03 percent) to 59,752.70.
The mid cap 100 index fell 69.90 points (0.11 percent) to 61,043.25, while the small cap 100 index declined 47.55 points (0.27 percent) to 17,829.25.
Market breadth favoured declines: 1960 stocks rose and 2197 fell on the BSE; 1520 rose and 1544 declined on the NSE.
Seventy-three NSE stocks hit 52-week highs, while 117 hit lows. Six hit upper circuits and eleven hit lower circuits.
For Nifty, a breakout above last week’s 26,310 high may trigger a move towards 26,500–26,700. Support is at 26,100. Today, support is seen at 26,180 and 26,110; resistance at 26,260 and 26,310.
India’s GDP surged, rising 7.8 percent in Q1 and 8.2 percent in Q2. Growth for the first half of FY26 stands at 8 percent, prompting upward revisions to full-year real GDP estimates.
The government cut spending significantly, but credit for the growth momentum partly belongs to consumers—especially rural households—whose demand rose by 7 percent in Q1 and 7.9 percent in Q2. This boosted factory output from 2.2 percent to 9.1 percent.
Crucially, moderating inflation supported real growth calculations. Only 0.9 percent was deducted from nominal growth in Q1 and 0.5 percent in Q2, compared to larger reductions when inflation is high.
Despite the strong numbers, optimism should be tempered. The Budget projected nominal GDP at ₹356.98 lakh crore for FY26, with 10.1 percent growth. After half the year, GDP stands at ₹171.30 lakh crore, translating to just 8.78 percent nominal growth. The target will likely be missed.
Lower nominal growth means lower tax revenue. With income tax and GST rates recently cut, a shortfall of around ₹1.5 lakh crore is expected. Since the deficit cannot widen, expenditure will have to be trimmed—and the first seven months already show spending cuts.
Tax collections have slipped: last year, seven-month collections were 50.5 percent of the target; this year they are 44.9 percent. Revenue expenditure has been reduced from 54.1 percent to 50.9 percent. These cuts may slow GDP growth ahead.
India may also fall short of overtaking Japan as the world’s fourth-largest economy this year. A weaker rupee and slower nominal growth are to blame. The IMF earlier projected India’s GDP at $4.19 trillion for FY26 against Japan’s $4.13 trillion. The updated estimate now puts India “barely above $4 trillion”. First-half GDP is only $1.99 trillion.
Globally, GDP is compared in dollar terms at current prices, where India’s growth sits below 6 percent. Hence, the caution against excessive excitement. India’s $5 trillion GDP target has been pushed to FY29.
The government is introducing a Health and National Security Cess on manufacturers of cigarettes, gutka and pan masala, replacing the current GST compensation cess. The cess will be based on installed capacity and production. The Bill will be tabled in Parliament today.
Currently, tobacco products attract 28 percent GST plus compensation cess of 5–280 percent depending on the product. Under the new structure, GST will be capped at 40 percent, with the cess designed to avoid extra consumer burden, according to Finance Minister Nirmala Sitharaman.
ITC, VST Industries and Godfrey Phillips will be most affected. ITC shares are down 17 percent this year, VST 25 percent, while Godfrey Phillips has risen 71 percent.
• ICICI Bank has raised ₹3,945 crore via 15-year bonds at a coupon of 7.4 percent.
• Lenskart posted a 20.8 percent rise in Q2 revenue, with net profit up 19.7 percent to ₹102.2 crore.
• Waaree Energies won a contract to supply 140 MW of solar modules.
• Maharashtra Seamless secured a ₹217 crore order from ONGC for seamless pipes.
• Tejas Networks received ₹84.95 crore under the PLI scheme.
• Artham Investment announced a 1:4 bonus issue.
After trading was halted for long periods on Friday, gold jumped 1.5 percent to close at $4,220.40 per ounce, rising to $4,244.50 this morning and reaching an intraday high of $4,269.80.
In weekend surveys, 70 percent of respondents expected gold to rise this week. Morgan Stanley sees gold touching $4,500 by mid-2026; Goldman Sachs forecasts a break above $4,900 by end-2026.
Ukraine’s foreign intelligence agency claims Russia has been forced to sell a substantial portion of its gold reserves due to sanctions and war costs. This remains unverified. The National Welfare Fund, Russia’s official reserve pool, reportedly shrank from $1.135 trillion in 2022 to $516 billion now. Gold holdings fell from 405.7 tonnes to 173.1 tonnes. Commercial banks are said to be absorbing the gold.
Spot silver shot up from $53.23 to $56.23 per ounce on Friday—over 6 percent—rising further to $57.74 this morning and touching $58.25 at its peak.
Silver prices jumped across global spot and futures markets after a near 10-hour outage at the CME Group’s exchanges. Some traders allege the outage was engineered to protect a trader short 12,500 tonnes of silver—claims that remain unproven.
Silver inventories in major hubs such as London, Chicago and Shanghai are at multi-year lows. London’s stocks, once above 30,000 tonnes, are now near 20,000 tonnes. Industrial demand for silver is surging due to EVs, AI chips, and solar and renewable applications. Domestic demand in India has crossed 4,000 tonnes. While fundamentals favour higher prices, Friday’s spike was abnormal.
Silver has risen 97 percent over the past year—from $29 to $56 per ounce. Some analysts now see a move towards $100.
Such a rally has not been seen since 1979–80, when the Hunt brothers cornered a third of the US silver market, sending prices from $6.08 to $49.45—up 713 percent—before a government crackdown caused a collapse. Their fortune fell from $500 billion to below $100 billion, eventually wiping them out. Silver later crashed to $4.
Platinum is at $1,663, palladium $1,450 and rhodium $7,700 this morning.
Following Friday’s trading halt, industrial metals spiked. Copper rose 0.64 percent to $11,004 per tonne after touching a record $11,200. Aluminium climbed 1.40 percent to $2,868. Nickel, lead, zinc and tin also advanced.
Rubber gained 2.25 percent to 177 cents/kg. Cocoa surged 6.62 percent to $5,404 per tonne. Coffee rose 0.22 percent, tea fell 0.58 percent and palm oil rose 0.61 percent.
The dollar index fell to 99.46, easing further to 99.34 this morning.
The euro strengthened to $1.1614, the pound to $1.3242, and the yen firmed to 155.75 per dollar. The yuan held at 7.08 per dollar; the Swiss franc rose to $0.8034.
US bond prices fell, with the 10-year yield rising to 4.036 percent.
The rupee weakened again on Friday, closing at 89.46 per dollar, down 15 paise. Only a major trade agreement or meaningful FPI inflows would support the currency. The IMF, which reviewed RBI’s intervention in November, criticised efforts to prop up the rupee.
China’s yuan rose to ₹12.61 on Friday.
Uncertainty over the Ukraine peace agreement supported crude prices. Brent closed at $62.31 on Friday and climbed 1.1 percent to $63.06 this morning.
