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Informist, Tuesday, Dec. 23, 2025

 

By Arya S. Biju

 

MUMBAI – Analysts were divided on the direction of benchmark indices Wednesday, with some expecting bullish sentiments to continue while others see the benchmark indices mostly consolidating with a positive bias. Some analysts also expect the Nifty 50 to reach a fresh record high in the coming sessions. While the improving domestic demand outlook and expectations of a recovery in earnings growth provide underlying support, uncertainty around the India-US trade deal timeline, global trade negotiations and the trajectory of the rupee will continue to impact market sentiment, according to analysts. 

 

Tuesday, the benchmark equity indices closed flat. The Nifty 50 settled at 26177.15, up 4.75 points and the BSE Sensex closed at 85524.84, down 42.64 points. After opening slightly higher, both benchmarks swung between gains and losses for the better part of the session as traders sold call as well as put options in the derivatives chain of the Nifty 50 expiring Tuesday, analysts said. Market participants wrote call options at 26200-26250 strikes and puts at 26200 and 26150 strikes, resulting in sideways movement of the indices, Vipin Kumaar, derivatives and technical analyst at Globe Capital Market, said.

 

After Tuesday's volatile session, the benchmark indices are likely to consolidate at higher levels and remain steady in the holiday-shortened week, supported by favourable global cues, Siddhartha Khemka, head of research, wealth management at Motilal Oswal Financial Services, said in a note. Meanwhile, Shrikant Chouhan, head of equity research at Kotak Securities, expects bullish sentiment to continue as long as the Nifty 50 and Sensex trade above the key support zones of 26120–26050 points and 85250–85000 points, respectively. Chouhan expects the uptrend in the indices to become vulnerable if it falls below the 26050 points and 85000 levels. 

 

"Technically, the setup remains favourable for further upside momentum (in the Nifty 50 index), with the possibility of new lifetime highs unfolding over the next few trading sessions," Dhupesh Dhameja, derivatives research analyst at SAMCO Securities, said in a note. 

 

Tuesday, the rupee closed flat against the dollar as the impact of dollar purchases by importers was offset by the weakness in the US currency, dealers at the foreign exchange market said. After falling to a low of 89.8500 a dollar, the rupee recovered to close at 89.6500 a dollar. This followed a slight recovery in the three sessions before Monday, during which it appreciated nearly 2% against the dollar after hitting a fresh record low last week. 

 

"Despite this temporary stability, the combination of surging forward premiums, rising bond yields, and thinning liquidity points towards a volatile path ahead," Dilip Parmar, senior research analyst at HDFC Securities, said in a note. Weakness in the rupee has been one of the primary reasons for the decline in the stock market last week. Both the Nifty 50 and Sensex have fallen nearly 1% each in the first four sessions of the past week. 

 

Monday, foreign investors turned net sellers again, after having been net buyers of Indian equities for the previous three sessions. They sold stocks worth a net INR 4.57 billion on Monday. So far this month, foreign investors have sold equities worth over INR 120 billion on a net basis. Meanwhile, domestic investors continued to be net buyers, buying stocks worth INR 40.58 billion Monday. 

 

While the signing of a trade deal between India and the US is expected to have some positive impact on foreign investors, it is not the only factor, Anita Gandhi, director and head of the institution at Arihant Capital Markets, said. "They (foreign investors) look at more or less so many other factors too," Gandhi said. Earnings growth recovery, the rupee's trajectory, and the valuation of Indian equities are among the factors that foreign investors will be watching, Gandhi said.

 

"... the Indians are hopeful that the flows will return back in the new calendar (year), and to some extent, we have seen some flows in the last two to three trading sessions. But again, the consistency of the flows need to be observed, and so, the next earnings season will also play some wider role, you know, on that front (inflow of foreign investors)," Gandhi said. 

 

On Wednesday, the Nifty 50 index is expected to find support at 26000-26050 points and resistance at 26315-26400 points, technical analysts said. Going ahead, the market will track key global economic data, including the US advance report on durable goods and the GDP print for the September quarter, due at 1900 IST, followed by initial jobless claims due Wednesday.  End

 

Edited by Saji George Titus

 

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