Stock Market Next Week: India-Russia Deals, US Fed Meet, And Other Cues To Watch

Domestic equities opened the previous week on a softer note as investors booked profits after the benchmark indices scaled record highs. Early week gains were led by strong Q2 gross domestic product (GDP) data and robust auto numbers. However, persistent foreign institutional selling (FII) selling, a weaker rupee and uncertainty around India-US trade negotiations, weighed on the sentiment in the latter week. 

Markets, however, bounced back on December 5 after the Reserve Bank of India (RBI) surprised with a 25-basis-point rate cut, the first in six months, and announced a few liquidity-enhancing measures.

On December 5, the Nifty 50 rose 152.70 points, or 0.59 per cent, to 26,186.45, while the Sensex gained 447.05 points, or 0.52 per cent, to end at 85,712.37.

Key Market Cues To Watch Next Week

Here are the key market cues that are likely to guide investor sentiment on the D-Street in the coming week from December 8 to 12:

India-Russia Deals During Putin’s Visit

Russia's President Vladimir Putin said Moscow is ready to provide “uninterrupted shipments” of fuel to India. “We are ready to continue uninterrupted shipments of fuel for the fast-growing Indian economy,” Putin told Prime Minister Narendra Modi during his two-day visit to the country.

This comes at a time when India is also in talks with the United States over a trade deal on condition that India will reduce its oil imports from Russia.

India and Russia also signed several new agreements during Putin’s visit. Leaders of both the countries signed a total of 16 agreements in areas related to defence, trade, economy, healthcare, academics, culture and media.

RBI MPC Repo Rate Cut

The RBI's Monetary Policy Committee (MPC) on December 5 slashed the repo rate by 25 basis points to 5.25 per cent, its fourth rate cut in 2025, and maintained the policy stance as “neutral.” With this move, the RBI has lowered the policy rate by a total of 125 basis points so far. The Standing Deposit Facility rate now stands at 5 per cent, and the Marginal Standing Facility and bank rate have been revised to 5.5 per cent.

The central bank raised its real GDP growth forecast for FY26 to 7.3 per cent, up by 50 basis points from its earlier estimate. CPI inflation for FY26 has been projected at 2 per cent, which is 60 basis points lower than the previous outlook.

RBI To Conduct OMO Purchases Of G-Secs

The RBI also said it will buy government securities worth Rs 1 lakh crore through Open Market Operations and carry out a three-year dollar-rupee purchase and sale swap of $5 billion, to infuse long-term liquidity into the financial system.

Open Market Operations are one of the key monetary policy tools used by the RBI to manage liquidity. Through these operations, the central bank buys or sells government securities to to regulate liquidity in the banking system.

The announcement comes at a time when the rupee has seen a sharp depreciation and recently slipped below the Rs 90-per-dollar mark.

US Fed Meeting

The US Federal Reserve’s Federal Open Market Committee (FOMC) will meet on December 9-10 to decide whether to go in for another rate cut, after reducing rates by 0.25 percentage points in October, or maintain the status quo.

Chicago Mercantile Exchange's (CME) FedWatch tool indicates traders are pricing in an 86.2% chance of another 25-basis-point cut in December.