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Informist, Monday, Dec. 15, 2025

 

By Arya S. Biju

 

MUMBAI – The benchmark equity indices are expected to consolidate in the short term with the bias remaining positive amid improving visibility of an earnings growth recovery and expectations of an India-US trade deal, according to analysts. The domestic equity market, however, is expected to be volatile Tuesday, when the weekly derivatives contracts of the Nifty 50 index expire. Meanwhile, depreciation of the rupee against the dollar and the sustained sell-off by foreign investors is expected to continue to have an impact on market sentiment.

 

After more than a year of muted returns, analysts expect better returns from domestic equities driven by earnings growth and easing economic conditions. However, high valuations may still lead to moderate returns going forward. Pravin Bokade, head of research at IDBI Capital Markets & Securities, expects the Nifty 50 index to give 10-12% returns in 2026, compared with 10% so far this year. "Overall. the Indian economy is doing well, the market valuation is comfortable right now. We need to see the earnings pick up," Bokade said.

 

Bokade expects the earnings growth of domestic companies to improve in the December and March quarters. He also expects the growth to "be decent" in the financial year 2026–27 (Apr-Mar). Mutual fund Mirae Asset Investment Managers India also remains "constructive" on the equity market as it expects earnings growth to return to a double-digit trajectory after a muted FY26. The fund house's Chief Investment Officer Neelesh Surana expects earnings growth to be driven by improving demand, tax cuts, and monetary easing.

"The US-India trade deal, if it happens, then probably that will be one of the big triggers for the market going ahead," Bokade said. Though Commerce Secretary Rajesh Agrawal said Monday that the government is "very close" to securing a "framework" deal with the US to lower the 50% tariff on exports from India, he did not give a timeline for the deal. Both countries continue to negotiate a bilateral trade agreement, with the framework deal focusing on reciprocal tariffs.

Analysts, however, expect some selling pressure at higher levels amid depreciation of the rupee against the dollar, continued outflow of foreign institutional funds from domestic equities, and the delay in the trade deal with the US. The rupee has continued to decline against the dollar, hitting a fresh record low of 90.79 Monday. Going forward, the rupee is expected to fall 6–7% annually in the next year or two, against the average annual depreciation of 4% since 2017, to the 100-per-dollar level owing to structural weakness, Systematix Shares and Stocks (India) Ltd. said in a report Monday.

 

Technical analysts expect the Nifty 50 to face resistance at 26200-26300 points and find support at 25700-25900 points. Monday, the Nifty 50 closed at 26027.30 points, down 19.65 points. The BSE Sensex closed at 85213.36, down 54.30 points.

 

Tuesday, investors will watch out for the HSBC Flash India Purchasing Managers' Index for December. Globally, investors will focus on key economic data, including US non-farm payrolls, retail sales, unemployment rate, and the manufacturing Purchasing Managers' Index, which will be closely tracked for cues on the growth momentum in the world's largest economy and monetary policy expectations for 2026, analysts said.  End

 

Edited by Rajeev Pai

 

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