Market Wrap

Indian equity markets remained range-bound and volatile on December 19, marking the third consecutive week of investor fatigue. The session began on a weak footing, with the Nifty50 slipping below its key 50-DEMA in early trade. Although the index attempted a recovery from intraday lows, selling pressure resurfaced in the latter half, keeping sustainability in question. The Nifty eventually closed almost flat, managing to defend the crucial 25,800 zone.

On a weekly basis, the benchmark extended its losing streak, declining nearly 0.9% (around 231 points). Sectoral breadth stayed largely negative through the week, with Realty, Auto, Energy, and Financial stocks witnessing sustained selling pressure. Technically, the Nifty struggled to decisively breach the 25,930 resistance zone, while the 25,700 level emerged as an important near-term support.

In contrast, the Nifty Midcap Index showed relative resilience, ending the session in the green and forming a bullish candlestick near its 50-DEMA - highlighting selective buying interest away from frontline indices.

Globally, European markets extended their winning streak, with marginal gains across major indices. On the macro front, the Bank of England cut interest rates by 25 basis points, underscoring growing divergence in global monetary policy. Meanwhile, anticipation is building ahead of the Bank of Japan’s policy decision, with markets pricing in an 86% probability of a rate hike that could take Japanese rates close to 0.75%—the highest in nearly three decades. Such a move could strengthen the yen and raise concerns around potential unwinding of the yen carry trade. Investor focus also remains firmly on the upcoming US November CPI inflation data, a key input for global liquidity and risk sentiment.

What's Ahead

Markets are likely to remain highly sensitive to global macro cues, particularly the US CPI print and the Bank of Japan’s policy outcome. Any sharp appreciation in the yen could revive fears of yen carry trade unwinding, exerting pressure on global and emerging market assets. Domestically, the Nifty’s ability to hold above the 25,700 support zone will be crucial, while resistance is placed near 25,920–26,000. With central bank actions driving volatility in currency and bond markets, equities may continue to witness stock-specific and selective moves rather than broad-based trends in the near term.

Market Snapshots

Institiutional Activity

Sectoral Performance

Technical Outlook

Nifty 50

The NIFTY 50 ended virtually unchanged at 25,815.55, forming a volatile intraday structure after opening lower and testing its 50-day EMA, where it found buying support for the first time in over three months. Despite a recovery from the day’s low of 25,726, the index failed to sustain above the 25,900 zone, highlighting continued supply at higher levels. Momentum indicators remain subdued, with the RSI flatlining below 50, suggesting a mild bearish undertone despite intraday resilience. As long as the index holds above the 50D EMA and the 25,700 support zone, a deeper breakdown may be avoided; however, a decisive move above 25,930–26,000 is required to revive bullish momentum. Until then, the index is likely to remain range-bound with a negative bias.

Bank Nifty

The NIFTY BANK closed marginally lower at 58,912.85 after failing to sustain above its 20-day EMA, indicating selling pressure at higher levels despite intraday recovery. The index rebounded from its lows but lacked follow-through buying, reflecting indecision among banking heavyweights. RSI remains near the neutral 50 mark, pointing to a lack of clear directional momentum. On the downside, the 58,700–58,600 zone remains a crucial support area, while on the upside, sustained strength above 59,200–59,300 is required to shift sentiment in favor of bulls. Until a breakout emerges, Bank Nifty is likely to consolidate with heightened volatility.

Nifty Financial Services

FINNIFTY ended marginally higher at 27,267.10, outperforming broader markets on the back of selective buying in insurers and NBFCs. The positive close, coupled with improving market breadth, indicates relative strength compared to other frontline indices. However, the presence of selling in heavyweight private banks capped upside momentum. Technically, the index appears to be in a consolidation phase, with a mildly positive bias as long as it sustains above the 27,000 zone. A decisive move above recent swing highs would be needed to confirm trend continuation, while failure to hold key supports could drag the index back into a sideways-to-negative setup.

Sensex

The BSE SENSEX closed marginally lower at 84,481.81, mirroring the broader market’s indecisive tone. Gains in IT stocks provided support, but persistent weakness in pharma, metals, and power stocks limited any meaningful recovery. The index continues to trade within a narrow range, reflecting distribution at higher levels and lack of broad-based participation. With momentum indicators showing no strong reversal signals, the SENSEX is likely to remain range-bound in the near term. A sustained move above recent resistance zones is required to re-establish upside traction, while failure to hold immediate support levels could invite further consolidation.