Market Wrap

Indian equity benchmarks showcased notable resilience on Monday, shrugging off a weak opening to stabilise above key levels. The Nifty50 began the session with a downside gap but quickly found buying support at lower levels, recovering most of its intraday losses to close marginally lower by 0.08%. Importantly, the index held firmly above the psychologically and technically crucial 26,000 mark, signalling that selling pressure remains contained for now.

Sectorally, Bank Nifty outperformed the broader market and ended the session with mild gains. The index is hovering near a potential bullish range breakout, with selective buying seen in heavyweight banking stocks - an indication that relative strength in financials could persist in the near term.

From a global perspective, European markets provided supportive cues, with major indices gaining around 1%. Compared to mixed trends across Asian peers, Indian markets displayed relative strength, underscoring domestic resilience despite an uncertain global backdrop.

What's Ahead

With weekly expiry out of the way, option writers appear to have capped near-term volatility, pointing towards a range-bound and largely directionless market in the immediate term, where option premium decay may dominate. The Nifty’s ability to defend the 25,922–25,938 zone suggests downside momentum remains limited. A decisive break below this band would have significantly weakened sentiment, but that scenario has been avoided for now.

On the technical front, immediate support is seen at 25,950 and 25,900, while resistance is placed at 26,080 and 26,164. The broader supply zone remains active between 26,150–26,300, an area that has capped rallies since November.

Globally, market participants will closely track US November retail inflation data. Any surprise on the inflation front could reshape expectations around future Federal Reserve policy, potentially triggering volatility across global equity markets, including India.

Market Snapshots

Institiutional Activity

Sectoral Performance

Technical Outlook

Nifty 50

The NIFTY 50 ended marginally lower at 26,027.30 after a volatile session, reflecting mild distribution at higher levels amid FII outflows and rupee weakness. Despite intraday pressure, the index defended the 25,900 zone and closed well off the day’s lows, indicating that downside momentum remains limited. The RSI hovering around 55 suggests subdued but still neutral-to-positive momentum, pointing towards consolidation rather than a trend reversal. As long as Nifty holds above the 25,877–25,784 support band, the broader structure remains intact, while a sustained move above 26,175 could open the door towards 26,268. Failure to clear resistance may keep the index range-bound in the near term.

Bank Nifty

Bank Nifty outperformed the broader market, closing higher at 59,461.80 and maintaining its position above the 20-day EMA, a constructive technical signal. Buying interest in PSU banks continues to provide underlying strength, even as private banking heavyweights witnessed mild profit-taking. The RSI near the 60 zone indicates strengthening bullish momentum, suggesting that the index remains well-placed for an upward bias. Immediate support is seen at 59,148 followed by 58,953, while a decisive breakout above 59,776 could accelerate gains towards the 59,970 zone. Overall, the trend remains positive with a buy-on-dips approach likely to persist.

Nifty Financial Services

The NIFTY Financial Services index slipped 0.25% to close at 27,603.15, underperforming Bank Nifty due to weakness in select financial heavyweights. Despite the decline, the index remains within a broader consolidation range, with buying interest emerging near lower levels. The near-term support zone at 27,443–27,339 will be crucial to watch, as a breakdown below this band could invite further pressure. On the upside, resistance at 27,782 and 27,887 may cap rallies unless broader participation improves. Overall, the index is likely to remain range-bound with stock-specific action dominating.

Sensex

The BSE Sensex closed marginally lower at 85,213.36, reflecting selective selling in auto and financial stocks, while FMCG and IT provided stability. Technically, the index continues to consolidate near record-high zones, indicating a pause rather than a reversal. Immediate support is placed at 84,756, followed by 84,463, which should act as a strong demand area. On the upside, a sustained move above 85,704 could revive bullish momentum and push the index towards 85,997. Until a directional breakout emerges, the Sensex is likely to trade sideways with a positive bias.