Profit booking and muted global trends keep equities range-bound; Nifty sustains above key support zone.
In a volatile and holiday-shortened trading week, Indian equity markets saw marginal declines as investors opted for profit booking amid a lack of fresh domestic or global triggers. The benchmark BSE Sensex ended the week at 85,041.45, down 367 points or 0.43%, while the NSE Nifty 50 slipped 99.80 points or 0.38% to close at 26,042.30. Despite the weakness, the Nifty managed to hold above the crucial 26,000 support level, keeping the medium-term bullish sentiment intact.
Mixed cues and lack of momentum
This week’s trading pattern reflected a cautious mood among investors. With major global indices moving in a narrow range and no new domestic developments to spark buying interest, the Indian market largely remained range-bound. The absence of significant triggers such as corporate earnings, major policy announcements, or global data releases contributed to muted sentiment.
Market experts noted that the last trading week of December typically witnesses lighter volumes due to holiday closures in global markets. The partial market activity and reduced institutional participation tended to keep traders on the sidelines, awaiting direction from global cues early next year.
Sectoral performance: Metals shine, IT drags
On the sectoral front, metal stocks displayed resilience and were among the top gainers of the week, rising nearly 0.47%. The segment benefited from stronger commodity prices and positive cues from global metal markets, especially as China hinted at potential economic stimulus to support its manufacturing sector. Stocks like Tata Steel, Hindalco, and JSW Steel recorded modest gains.
In contrast, the information technology (IT) sector underperformed, slipping by around 1.03%. Persistent concerns over global tech spending, especially among key U.S. clients, and cautious revenue growth projections for FY26 weighed on large-cap IT counters such as Infosys, TCS, and Wipro. The weaker performance of the IT index pulled down the overall indices.
Other sectors such as banking, healthcare, and auto traded mixed. PSU banks showed slight weakness due to profit-taking after recent rallies, while select private banks remained stable. Auto stocks were largely flat, as December is traditionally a lower sales month with buyers awaiting new-year model launches and discounts.
Global and domestic factors
Globally, equity markets remained steady but muted during the Christmas week. U.S. indices measured minor gains, while Asian peers saw limited movement. The overall direction remained unclear as investors awaited insights into interest rate paths from major central banks in early 2026.
Domestically, investors remained watchful of inflation data and crude oil price movements. Cooling crude prices offered some comfort, but higher food inflation risks capped optimism. Bond yields remained stable, while the rupee traded in a narrow range against the U.S. dollar, reflecting balanced sentiment.
Experts believe that despite the short-term consolidation, India’s broader market outlook remains positive, supported by strong domestic growth and corporate earnings momentum. “Indian equities are witnessing healthy consolidation after record highs. The underlying fundamentals such as GDP growth, liquidity, and earnings outlook remain favorable for medium-term investors,” said a senior market analyst at a leading brokerage.
Technical outlook: Support at 26,000 for Nifty
From a technical perspective, the Nifty 50 maintained a bullish bias as it successfully held the 26,000 support mark, a crucial psychological and technical level. Analysts note that as long as Nifty remains above 26,000, the broader trend stays positive. The immediate resistance is seen around the 26,300–26,400 zone, while support lies between 25,850 and 26,000.
“Though short-term volatility may continue due to low volumes and global uncertainties, the market structure remains constructive. Traders should focus on quality stocks from sectors like metals, capital goods, and banking for potential upside once momentum returns in January,” added the analyst.
Market outlook for next week
Looking ahead, market participants expect sideways movement in the first few sessions of the new year, with focus likely shifting to updates on global economic indicators and foreign institutional investment (FII) flows. Any new announcements on fiscal spending or government stimulus could influence sectoral trends.
Investors will also monitor developments in crude oil prices and the U.S. bond market, as these factors may determine the near-term direction of emerging market equities.
Despite the short-term caution, most experts remain optimistic about India’s growth trajectory. The market’s ability to sustain at higher levels reflects investor confidence in the country’s economic fundamentals, especially with domestic demand and investment activity showing steady strength.
Key highlights at a glance:
- Sensex: Down 367 points or 0.43%, settles at 85,041.45
- Nifty 50: Down 99.80 points or 0.38%, ends at 26,042.30
- Metal index: Gains 0.47%, most resilient among sectors
- IT index: Falls 1.03%, biggest drag on indices
- Nifty support: 26,000 crucial level for bullish bias
- Market tone: Cautious, range-bound due to lack of fresh triggers
Conclusion
In summary, Indian markets ended the week on a subdued note, influenced by thin trading volumes and muted global trends. However, the resilience of the Nifty in holding above 26,000 signals continued optimism for the medium term. With global uncertainties easing and the corporate earnings season approaching, the markets could see renewed momentum as the new year begins.
