Indian equity markets head into the final trading days of 2025 and the opening sessions of 2026 on a cautious note, with benchmarks witnessing profit booking, muted global cues, and the absence of strong directional triggers.
The Nifty ended the last fully traded week of December lower by nearly 100 points at 26,042, down 0.4 percent, as selling pressure emerged in select blue-chip stocks.
Stock Market Weekly Forecast From 29 December 2025 To 2nd January 2026
Broader markets mirrored the cautious undertone, with the Nifty Midcap100 and Smallcap100 indices slipping 0.2 percent and 0.1 percent respectively. Sectorally, metals remained the standout performers, supported by global commodity strength, as the metal index rose 0.6 percent.
Key Triggers to Drive Market Sentiment Next Week
IIP Data in Focus as FII Outflows Weigh on Market Sentiment
On the macro front, investors will closely track India's Industrial Production data scheduled for release on Monday, which could provide near-term cues on economic momentum. Sustained foreign institutional investor (FII) selling weighed heavily on sentiment, with an outflow of Rs 1,721 crore reported on Wednesday alone.
India VIX at Historic Lows
Volatility remains unusually subdued. With India VIX ending at record-low weekly closes, analysts describe the current phase as one of indecision rather than complacency. The sharp compression in volatility suggests the market is waiting for a decisive trigger, with such calm phases historically preceding large directional moves.
India-New Zealand FTA
Alongside domestic factors, markets are also tracking global developments, including India's newly signed Free Trade Agreement with New Zealand and softer core infrastructure data. While the FTA reinforces India's Indo-Pacific outreach and export diversification strategy, growth in the eight core infrastructure sectors slowed sharply to 1.8 percent in November.
Q3 Results in January 2026
While Q3 earnings alone may not set a trend, positive surprises in margins or management guidance could help justify current valuations.
Global Commodity Rally Supporting Metal Stocks; Gold, Silver, Platinum, Palladium Roars
Global commodity markets have seen an extraordinary rally, particularly in precious metals. Silver surged nearly 9 percent on Friday to a record high of $78.65 per ounce and has risen more than 158 percent over the past year, significantly outperforming gold.
As per latest trends, Gold prices also climbed to a fresh all-time high of $4,562.70 an ounce, while platinum jumped to a record $2,454.12 after gaining nearly 10 percent in a single session. Palladium rose more than 14 percent to $1,924.03 an ounce and is up over 90 percent year to date.
Nifty Weekly Prediction: Check Nifty50 Outlook for Next Week From 29 December 2025 to 2 January 2026
According to Bajaj Broking Research, the Nifty has entered a consolidation phase after its recent up move. As noted, "The index formed a bearish candlestick pattern with a lower high and a lower low signalling profit booking after recent up move." The brokerage expects the index to remain range-bound with stock-specific action dominating trade.
"In the coming week index is likely to extend the last four weeks' consolidation in the broad range of 25,700-26,300. A clear breakout or breakdown will determine the next directional move," the report said.
A sustained breakout above 26,300 could open further upside towards 26,500 in the coming weeks, while key support is placed in the 25,700-25,800 zone, which coincides with the 50-day EMA and important retracement levels. Holding above this support will keep the short-term bias positive.
Bank Nifty Weekly Prediction
Bank Nifty has also shown signs of near-term fatigue after a strong rally over the past two months. Bajaj Broking Research noted, "The index formed a bearish candlestick pattern with a lower high and a lower low signaling profit booking for the second session in a row." The index is expected to consolidate and build a base in the 58,500-60,100 range in the coming weeks.
The brokerage added that "a strength above last two weeks' high of 59,500 will open upside towards the recent all-time high of 60,100 levels." Despite near-term consolidation, the broader structure remains constructive, with sustained demand visible at higher levels. Key support lies in the 58,300-58,600 zone, which aligns with the 50-day EMA and the previous breakout area.
Source: good returns.in
Disclaimer
The views and recommendations expressed are solely those of the individual analysts or entities. All information is provided for informational and educational purposes only and should be independently verified from licensed financial advisors before making any investment decisions.
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