Sensex, Nifty within touching distance of all-time highs: Analysts list 5 near-term triggers for next round of market rally

Indian benchmark indices closed near lifetime high levels on November 26. Analysts have suggested key near-term triggers that markets are currently awaiting to surge to fresh record high levels.

Sensex gained more than 1,000 points to close at 85,609.51 on Wednesday, nearly 369 points away from its all-time high level of 85,978, which it had hit in September last year. Nifty 50 meanwhile ended the session at 26,205.30, only 72 points lower than its lifetime high of 26,277.

"The market is already close to its previous peaks, so even small positive triggers can be enough to pull the Sensex and Nifty to fresh records, provided there are no major global shocks in the near term," said Abhinav Tiwari, Research Analyst at Bonanza.

Here are five key triggers markets may be looking forward to in order to begin the next round of rally and scale fresh record highs:

 

RBI rate cut in December:

The Reserve Bank of India (RBI) is set to hold its Monetary Policy Committee (MPC) meeting from December 3 to December 5. The MPC has cut rates by a total of 100 basis points in the first half of 2025, but maintained a pause since August.

Despite earlier projections of no rate cut, analysts now increasingly expect India's central bank to cut rates during the upcoming meeting after RBI Governor Sanjay Malhotra said there is scope to further reduce policy interest rates.

"At the last MPC meeting in October, it was communicated clearly there is room to cut policy rates. Since then, the macro-economic data we have received has not indicated that the room to lower rates has decreased," he said during an interview with Zee Business.

"There is certainly room (to lower rates) but whether the MPC takes a call on that in the coming meeting or not, depends on the committee," he added.

A rate cut by the RBI will likely boost several heavyweight stocks from rate-sensitive sectors, which in turn will boost the markets. "Markets are sitting just below their record highs, and a clear breakout will be largely dependent on two things: more certainty around global rate cuts and the start of the domestic earnings season," said Siddharth Maurya, Founder & Managing Director, Vibhavangal Anukulakara.

 

India-US trade deal:

India and US are yet to conclude their much-awaited trade deal. Investors will actively look forward to progress on the deal front after US President Donald Trump-led administration increased tariffs on Indian imports to a whopping 50 percent earlier this year, citing New Delhi's continued purchase of Russian oil.

Trump however has repeatedly claimed that US is nearing a trade deal with India. While no timeline for the conclusion of the deal is known so far, any such agreement between the two countries will likely boost the markets sharply.

"Progress on trade negotiations and political stability will influence market momentum. Any positive development in the India-US trade talks can lift investor confidence," said Abhinav Tiwari, Research Analyst at Bonanza.

"Clarity on the evolving US–India trade framework is emerging as a meaningful sentiment driver. Any progress that strengthens bilateral trade, eases tariff concerns, or deepens technology and manufacturing partnerships will be viewed positively by the markets. India remains in a structural bull phase, but near-term moves will be dictated by these key macro catalysts," said Naren Agarwal, CEO, Wealth1.

 

Russia-Ukraine peace deal:

The United States has been preparing a peace plan to end the ongoing war between Russia and Ukraine. Ukrainian President Volodymyr Zelenskyy on Tuesday said that he was ready to advance a US-backed framework for ending the war with Russia and discuss disputed points with Trump in talks he said should include European allies.

The initial 28-point proposal put forth by US last week called on Ukraine to cede territory, accept limits on its military and abandon its plans to join NATO. Those terms would amount to capitulation for many Ukrainians after nearly four years of fighting in Europe's deadliest conflict since World War II.

According to reports, officials from Ukraine and Russia are set to meet in the near future to discuss terms of a peace plan. It is however important to note that such discussions had taken place earlier as well, bearing no fruit.

However, in case the two sides agree to the deal and end the war, markets will possibly see a sharp surge. The expectations have pushed down oil prices, with Brent crude falling to $62.38.

Also read: Key factors behind today's market rise

 

Fed rate cut optimism:

Despite initial expectations of a no rate cut, a higher probability of a December rate cut by the US Federal Reserve has been boosting global markets. New York Fed President John Williams, a permanent voter on rate policy and vice chair of the rate-setting Federal Open Market Committee, said on Friday that interest rates can fall "in the near term".

"I view monetary policy as being modestly restrictive...Therefore, I still see room for a further adjustment in the near term to the target range for the federal funds rate to move the stance of policy closer to the range of neutral," Williams said. Investors now put a nearly 60 percent chance of a 25 basis point cut at the U.S. central bank's December meeting, reversing what had been strong conviction that the Fed would pause due to concerns about inflation.

A rate cut by the Federal Reserve will likely increase discretionary spending in the US, which in turn benefits IT stocks which have a significant contribution to the markets. A sharp surge in IT stocks can push the benchmark indices towards fresh record highs.

"Lower interest rates in the US generally improve liquidity conditions and increase the attractiveness of emerging markets such as India, prompting risk-on sentiment across equities.

"Global sentiment remains constructive, supported by expectations of a December U.S. rate cut, keeping the overall tone optimistic," said Hitesh Tailor, research analyst at Choice Broking.

“The combination of strong global cues, easing rate concerns, and broad-based buying has helped the market stabilize after recent weakness," said Pravesh Gour, Senior Technical Analyst at Swastika Investmart.

 

Sustained FII inflows:

Foreign investors remained net buyers on November 25. Foreign investors (FIIs/FPIs) net bought Indian equities worth Rs 785 crore yesterday. At the same time, domestic institutional investors (DIIs) net bought shares worth Rs 3,912 crore, according to provisional exchange data.

However, FIIs have been net sellers of shares worth Rs 2.57 lakh crore in 2025 so far. DIIs have net bought shares worth Rs 6.91 lakh crore during the same period.

Sustained buying by FIIs may further push the markets closer towards record high levels. "FII flows have steadied, domestic liquidity is strong, and that is helping to support sentiment. If Nifty manages a sustained close above the current resistance zone, new highs may not be far away. There will be bouts of volatility, but as long as the macro environment stays steady, the overall direction still looks positive," Siddharth Maurya from Vibhavangal Anukulakara said.

Expectations of rate cuts by Federal Reserve have improved risk appetite across emerging markets, including India. This has encouraged foreign investors to increase their buying, said Abhinav Tiwari from Bonanza. "If US bond yields remain stable or move lower, and if there are no new banking or geopolitical issues globally, foreign institutional inflows into Indian stocks may continue," he added.

 

What should investors do?

Fundamentals indicate that the market is moving to a new high, said VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited. He added that the question now is 'When'.

He noted that the previous attempts by the Nifty and Sensex to break the 2024 September highs did not succeed since the rally lost steam on FII selling, and the expected US - India trade deal failing to conclude. "Also there was no clarity on the earnings growth for FY27. Now things are slowly changing in favour of a rally towards a new record high. The most important catalyst for the rally will come from strong earnings growth. FY27 is likely to witness above 15% earnings growth. This is a strong fundamental support. A US-India trade deal may happen at any time.  Weakness in the AI trade will nudge FIIs to turn buyers in India," he said.

"Investors should focus on largecaps and quality midcaps with  high growth potential. Smallcaps, in general, continue to be over valued,” he added.

Clearly, the market is within striking distance of fresh lifetime highs, but the breakout would be a function of how confidence builds at these important levels, said Ravi Singh, Chief Research Officer from Master Capital Services.

"For now, the trend is upwards, but traders are also cautious, which is quite normal when the indices approach the record zone. A brief phase of consolidation or mild profit booking would actually strengthen rather than weaken this setup. If the global cues stay supportive and the domestic flows are stable, new highs may be attempted in the near term," he said.

"Additionally, if Nifty holds above the key support of 25800-26000 then the uptrend can extend towards 26500-26700 levels. But the move may unfold in stages rather than in one sharp rally. What will matter most is whether buying interest stays broad-based and not confined to just a handful of large stocks," he concluded.

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