Market Wrap

Indian equity markets began the new calendar year with strong bullish momentum, decisively breaking out of a prolonged consolidation phase. The Nifty50 ended the week at a fresh all-time high of 26,330, logging a 1.10% weekly gain, supported by broad-based participation and a clear revival in risk appetite. Financials added strength to the rally, with Bank Nifty climbing nearly 2%, signalling renewed confidence in the sector.

PSU banks stood out as the top performers, as the Nifty PSU Bank index surged around 5%, closing above its November swing high and confirming a bullish flag breakout on the weekly charts. Midcap stocks, which had seen prior corrective pressure, staged a healthy rebound from oversold levels, aided by improving business updates and expectations of better earnings visibility.

Global cues remained supportive, with European markets trading firmly in the green and the DAX outperforming, reinforcing the risk-on environment. From a derivatives perspective, heavy put writing in the 26,200–26,300 zone indicates strong downside protection and growing trader confidence at higher index levels.

What's Ahead

The coming week is critical, with multiple macro and market triggers lined up. Investor focus will shift to FY26 GDP data due on 7 January, which will help shape macro expectations ahead of the Union Budget. At the same time, the Q3 earnings season will gather pace, driving sharper stock-specific moves particularly in banking, consumption-linked names, and midcaps.

Budget-related expectations around reforms and fiscal support could keep sentiment constructive. On the technical front, Nifty support lies at 26,270 and 26,200, while resistance is placed at 26,410, 26,490, and 26,570. As long as the index holds above key support zones, the broader trend remains positive, with any near-term dips likely to attract buying interest.

Market Snapshots

Institiutional Activity

Sectoral Performance

Technical Outlook

Nifty 50

The NIFTY 50 extended its bullish trajectory, closing at a fresh record high of 26,328.55, as broad-based buying across energy, PSU, metals, banking, and autos outweighed weakness in select FMCG names. The index has decisively moved out of its consolidation range, supported by a strong advance–decline ratio and sustained momentum, with the RSI holding comfortably above 60, signalling continued strength. Structurally, the trend remains firmly positive as long as the index sustains above the immediate support zone of 26,181–26,092. On the upside, a move beyond 26,467 could open the door towards 26,555 in the near term, though intermittent pauses or minor pullbacks cannot be ruled out after the recent sharp rally.

Bank Nifty

BANK NIFTY closed at 60,150.95, continuing its upward march on the back of broad-based participation from PSU banks and steady support from private sector heavyweights. The index has reclaimed and held above the psychological 60,000 mark, reinforcing bullish sentiment. However, the RSI has surged close to the 70 level, indicating that the index is approaching the overbought zone at higher levels. While the broader trend remains positive, some consolidation or mild profit-taking may emerge near resistance levels of 60,503–60,721. On the downside, 59,799 followed by 59,581 remains a crucial support band to watch for maintaining the bullish structure.

Nifty Financial Services

FINNIFTY ended higher at 27,899.15, supported by strong buying interest in NBFCs and PSU financials, reflecting improving risk appetite within the broader financial space. The index continues to trade in a higher high–higher low structure, indicating a healthy uptrend. As long as it holds above the immediate support zone of 27,690–27,577, the outlook remains constructive. A sustained move above 28,055 could trigger further upside towards 28,169, though select stock-specific volatility within financials may persist amid earnings-related cues.

Sensex

The BSE SENSEX closed at 85,762.01, mirroring the strength seen across frontline indices and registering a fresh leg of the ongoing uptrend. Broad-based buying across power, financials, autos, and select IT stocks kept the index well supported, despite drag from a few heavyweight FMCG and banking names. Technically, the structure remains bullish, with higher supports intact at 85,365 and 85,140. On the upside, a decisive breakout above 86,091 could pave the way towards 86,316, while any near-term dips are likely to be viewed as buying opportunities within the prevailing positive trend.