Markets had a positive week, mainly supported by strong domestic signals. The Nifty gained over one and a half per cent and is now just below 26,000. Inflation dropped to a 10-year low of 0.25%, lifting investor confidence. Company results also kept some stock-specific movement active. With the results season now over, analysts expect the market to look again at macro data, global cues and any updates on the India–US tariff issue.
Below are six key drivers that may guide the Nifty in the days ahead.
1) Market charts and trend signals
The Nifty has been moving sideways for almost four weeks and now appears ready to cross the resistance at 26,100. Analysts say that if it breaks this level, it could move towards 26,277 and then 26,500. Strong support stays at 25,650, the 20-DEMA level, followed by 25,400, said Ajit Mishra of Religare Broking.
The Bank Nifty hit a fresh lifetime high last week and remains strong. Mishra expects it to move towards the 59,500–60,500 range, with key support at 57,200–57,700.
2) Earnings wrap and sector cues
Q2 results were mixed. Mass-consumption categories were weak, some discretionary sectors improved, IT services showed limited growth and banks reported moderate loan expansion. These results will likely influence the market this week as investors select quality stocks after reviewing company and sector performance.
Metals, mining and oil marketing companies performed better than expected, and these stocks may see more interest, analysts said.
3) Foreign investor activity
Foreign Institutional Investors (FIIs) were net sellers in November, with outflows of Rs 13,925 crore. Selling has increased in recent days. However, FIIs continued buying through the primary market, investing Rs 7,833 crore so far this month.
For 2025 to date, FIIs have sold Rs 2.08 lakh crore through exchanges, while primary market buying stands at Rs 62,125 crore.
VK Vijayakumar of Geojit Investments said India’s underperformance compared to global markets has pushed FIIs towards markets like the US, China, Taiwan and South Korea, which are benefiting from the ongoing AI rally.
He added that this AI-driven trend may not last if concerns over a bubble increase. When the AI trade cools, India may again attract FII inflows, though the timing is uncertain.
4) Domestic data to watch
With results season over, the market will now look towards macroeconomic indicators and any high-frequency data releases for direction.
5) International triggers
Global mood will depend on key US data releases, including minutes from the latest Federal Reserve meeting. Movements in AI-linked stocks will also matter, as they can sway broader market sentiment.
6) Updates on India–US trade talks
There is growing talk of an upcoming India–US trade deal. US President Donald Trump recently said his administration plans to reduce the high tariffs imposed on India. Analysts believe that if the deal is announced, it could give the Nifty a strong push.
What traders can consider
The steep drop in inflation and steady macro fundamentals provide a supportive setting for equities. Mishra advises investors to stay focused on stock-specific ideas, especially in sectors driven by domestic demand. Traders may continue with a buy-on-dips plan as long as the Nifty holds key support levels. With several domestic and global triggers due soon, disciplined risk management, proper stop-loss levels and timely sector rotation will be important.
