Market Wrap

Indian equity markets showcased commendable resilience over the past week, successfully holding critical technical levels before staging a sharp rebound in the final session. The Nifty50 defended its 50-day EMA and closed the week around 25,970, ending marginally lower by 0.31% WoW a reflection of the ongoing tug-of-war between bulls and bears rather than outright weakness.

Sectorally, midcaps clearly outperformed. The Nifty Midcap Index formed a bullish hammer near its 50-DEMA and witnessed strong follow-through buying after crossing a recent swing high. The emergence of a higher-top, higher-bottom structure has improved the near-term technical setup, especially as historical trends suggest the Christmas period often supports a seasonal “Santa Rally.”

Global cues remained supportive but measured. European markets extended gains for a third straight session, though advances were largely capped within a narrow range. Domestically, sentiment improved intraday as a sharp decline in the US dollar aided a recovery in the rupee, triggering selective buying in stocks emerging from oversold zones. Importantly, strong put writing in the 25,800–26,000 range signals growing confidence among market participants that near-term downside may remain protected.

What's Ahead

The durability of the recent rebound will hinge primarily on FII activity, which continues to be the key swing factor for Indian equities. On the global front, investors will closely track crucial US macroeconomic data in the coming week - Q3 GDP, Industrial Production, and Consumer Confidence - as these could shape global risk appetite.

Trading volumes are expected to remain subdued due to the holiday-shortened week, with Indian markets closed on 25 December and several global markets also shut between 24–26 December.

From a technical standpoint, immediate support for Nifty lies at 25,890 and 25,840, while resistance levels are placed at 26,000, 26,080, and 26,165. A decisive breakout beyond these hurdles will be crucial in determining whether seasonal optimism evolves into a sustained year-end rally or remains a short-lived bounce.

Market Snapshots

Institiutional Activity

Sectoral Performance

Technical Outlook

Nifty 50

The NIFTY 50 snapped its four-session losing streak and staged a decisive rebound, closing at 25,966.40, up 0.58%, supported by strong, broad-based participation. From a technical standpoint, the index has successfully defended the 50-day EMA over the past two sessions and has now reclaimed the 20-day EMA, a constructive near-term development. The recovery in RSI above the 50 mark signals improving momentum and suggests that selling pressure is easing. The formation of a higher intraday base around 25,880 reinforces the strength of recent support, while a sustained hold above the 20-day EMA could open the door for a retest of the 26,000–26,100 zone. However, failure to build follow-through buying may keep the index range-bound, with the 50-day EMA acting as a key downside cushion.

Bank Nifty

The NIFTY BANK index closed mildly higher at 59,069.20, gaining 0.27%, but continued to lag the broader market on a relative basis. Technically, the index recovered from intraday lows, indicating demand near the 58,900–59,000 support zone, while the RSI’s uptick from near-50 levels points to gradual improvement in momentum. However, the index has yet to decisively reclaim its 20-day EMA, and the formation of a doji candlestick reflects ongoing indecision among participants. A clear breakout above the 20-day EMA is required to confirm strength and trigger fresh upside, while any renewed weakness below 58,900 could invite further consolidation in the near term.

Nifty Financial Services

FINNIFTY ended the session at 27,378.60, up 0.41%, supported by broad-based buying across non-bank financial names. The index continues to exhibit a constructive structure, with higher intraday lows and improving breadth suggesting accumulation on declines. Strength in key heavyweights has helped stabilize the trend, while momentum indicators remain supportive of further consolidation with a positive bias. Sustaining above the 27,300 zone could keep the index positioned for a gradual move higher, although resistance near recent swing highs may limit sharp upside unless banking stocks provide stronger participation.

Sensex

The BSE SENSEX closed higher by 447.55 points (0.53%) at 84,929.36, mirroring the positive tone seen in the NIFTY. Technically, the index has bounced firmly from short-term support levels and is attempting to re-establish upward momentum, supported by strong market breadth and leadership from select heavyweight stocks. The recovery indicates that dips continue to attract buying interest, though sustained strength above recent highs will be crucial to confirm trend continuation. In the near term, the index is likely to trade with a positive bias, while any pullback toward support zones may be viewed as a buying opportunity as long as broader market momentum remains intact.