Market Wrap

Indian equity markets ended the week on a mildly positive note but showed clear signs of exhaustion at higher levels. The week opened with a strong gap-up and aggressive buying on Monday; however, follow-through was missing as steady profit booking over the next three sessions wiped out most early gains. Despite this, the Nifty managed to close marginally higher by around 0.29%, successfully holding above the psychologically important 26,000 mark.

Sectoral performance remained mixed. Metal stocks continued to outperform, extending their recent momentum, while broader markets came under pressure, reflected in weakening market breadth. PSU stocks retained relative strength following the recent budget-led rally, though momentum appeared selective rather than broad-based.

Globally, markets remained subdued amid a festive, low-volume environment, with limited cues from major international indices. In the derivatives space, aggressive call writing at higher strikes signaled growing trader caution, suggesting that participants are hesitant to chase further upside without fresh triggers.

What's Ahead

With just two trading sessions left before the December F&O expiry, markets are entering a sensitive phase. Technically, the Nifty has closed below its previous two-day low, indicating a loss of bullish momentum below the 26,100–26,160 zone.

• Upside resistance: Bears are expected to defend the 26,235 level aggressively. A decisive breakout above this zone could, however, trigger sharp short-covering.

• Key support: The 26,000–25,920 zone remains crucial. A breakdown below this range may invite further near-term weakness.

• Market tone: Holiday-thinned volumes, reduced institutional activity, and global market closures next week could keep indices largely range-bound.

Until fresh domestic or global triggers emerge, stock-specific action is likely to dominate, with continued focus on PSU and metal stocks, while traders adopt a cautious, expiry-driven approach.

Market Snapshots

Institiutional Activity

Sectoral Performance

Technical Outlook

Nifty 50

The NIFTY 50 closed lower at 26,042.30, slipping below key intraday levels amid thin year-end volumes and sustained selling in heavyweight IT and banking stocks. The index has formed a mild bearish candle after failing to sustain above the 26,150 zone, indicating weakening short-term momentum. The RSI has slipped below 60, suggesting cooling bullish strength and a possible consolidation-to-corrective phase. As long as the index remains below the 26,166–26,245 resistance band, upside may stay capped, while a decisive breakdown below 25,909 could open the door toward the next support near 25,830. Overall, the near-term bias remains cautious with a range-bound to slightly negative undertone.

Bank Nifty

BANK NIFTY ended at 59,011.35, extending its corrective drift as selling pressure persisted across PSU and private sector banks. The index opened below its 20-day EMA and stayed under pressure through the session, though it continues to hover around this moving average, making a confirmed breakdown yet to be established. The RSI has cooled toward the 50 mark, reflecting a neutral-to-cautious setup and loss of upside momentum. Immediate resistance is placed at 59,208–59,330, while sustained weakness below 58,815 could accelerate downside toward 58,693. Until clarity emerges around the 20-day EMA, the index is likely to remain volatile within a broad range.

Nifty Financial Services

FINNIFTY closed lower at 27,430.75, underperforming the broader market due to continued pressure in NBFC and insurance heavyweights. The index remains below its recent swing highs, indicating distribution at higher levels, with momentum indicators pointing to further consolidation. Market breadth stayed decisively negative, reinforcing the short-term corrective bias. Immediate support is placed at 27,266, followed by 27,163, while recovery attempts may face stiff resistance near 27,602–27,705. A sustained move beyond resistance is required to revive bullish momentum; otherwise, stock-specific volatility is likely to dominate.

Sensex

The BSE SENSEX closed at 85,041.45, snapping lower amid broad-based selling in heavyweight stocks and weak market breadth. Technically, the index has slipped below its recent consolidation zone, signalling fatigue after the recent uptrend. Momentum indicators suggest mild bearish divergence in the short term, with resistance now seen at 85,420–85,652. On the downside, holding above 84,670 remains critical; a breach of this level could lead to a deeper correction toward 84,438. Overall, the Sensex appears to be entering a consolidation phase with a negative bias unless fresh buying emerges at lower levels.