Indian equity markets closed the holiday-shortened week with limited gains, as the ongoing phase of consolidation continued. Although the indices opened on a strong note, they later moved in a narrow range due to mixed global signals and low trading volumes at the year end. The Nifty settled at 26,042.30, while the Sensex ended at 85,041, reflecting a careful but stable mood among investors.
Market sentiment was shaped by both domestic and global developments. India signed a full Free Trade Agreement with New Zealand, supporting its push to expand trade in the Indo-Pacific region.
At the same time, growth in the eight core infrastructure industries slowed sharply to 1.8% in November, pointing to a near-term easing in industrial momentum.
Foreign Institutional Investors (FIIs) returned to selling after a brief pause. A steady rupee, record high gold prices and thin holiday participation kept activity muted.
Below are the key issues that could affect the markets in the coming week.
Derivatives settlement
The week will see the December F&O contracts expire as the market moves into 2026. This is likely to increase short-term price swings.
Indian economic numbers
Investors will track the November industrial production figures, budget value data, external debt numbers and the final HSBC Manufacturing PMI reading.
Global signals
International markets will react to key US updates, including the release of FOMC minutes and information related to the Federal Reserve’s balance sheet.
Chart patterns
The Nifty continues to hover near record highs, showing a pause within a broader uptrend. Immediate support lies between 25,500 and 25,700, while resistance is seen near 26,200. A clear move above this level could take the index towards the 26,500–26,700 zone.
“With liquidity remaining weak and major data awaited, markets may stay range-bound in the near term. Investors can look at buying on declines, especially in large-cap stocks and select cyclical sectors that offer stability,” said Ajit Mishra, SVP – Research, Religare Broking.
He advised traders to focus on individual stocks, use trailing stop-losses and avoid heavy leverage during the volatile expiry period and data-heavy week.
Overseas investor flows
As of December 27, FIIs have sold shares worth Rs 22,130 crore through the stock exchanges. Total equity sales for 2025 now stand at Rs 2,31,990 crore. Investments through the primary market were Rs 73,583 crore, leading to a net outflow of Rs 1,58,407 crore — the highest yearly net selling by FIIs since they entered Indian markets.
Rupee movement
The rupee traded slightly stronger around 89.75 against the US dollar as capital outflows slowed and low holiday volumes reduced sharp moves. The pair remains in a long-term upward trend.
“The 89.50–89.20 range is a strong support area. On the higher side, resistance is placed between 90.00 and 90.50. As long as the pair stays above 89.50, the medium-term outlook remains positive, with scope for a gradual rise towards 92 in early 2026,” said Ponmudi R, CEO, Enrich Money.
Oil price trend
Global crude prices moved up following geopolitical developments, including increased US pressure on Venezuelan exports and security worries in parts of Africa. Brent crude rose 0.4% to $62.48 a barrel, raising fresh concerns over inflation and higher input costs.
