Market outlook for next week (29-Dec to 02-Jan)

30 Dec 2025 , 06:25 PM

SECTORAL STORY FOR WEEK TO DECEMBER 26, 2025

The week to December 26, 2025 saw Nifty and Sensex close marginally in the positive as year-end uncertainty kept traders guessing. The week saw FPIs outflows of $(62) Million. Rupee closed on all trading days below the ₹90/$ mark.

Sectoral Index	Weekly Returns	Index (26-Dec)	Index (19-Dec)
Nifty India Defence	3.32%	7,774.35	7,524.45
Nifty Metals	2.71%	10,806.15	10,521.10
Nifty CPSE	1.79%	6,317.60	6,206.40
Nifty Chemicals	1.35%	28,950.70	28,565.75
Nifty Non-Banks	0.82%	31,962.25	31,702.20
Nifty Capital Markets	0.67%	4,670.50	4,639.55
Nifty FMCG	0.64%	55,132.05	54,781.35
Nifty MNC	0.60%	30,367.30	30,185.90
Nifty Automobiles	0.30%	27,739.85	27,657.25
Nifty Infrastructure	0.08%	9,564.45	9,557.20
Nifty Oil & Gas	-0.01%	11,958.15	11,959.25
Nifty Private Banks	-0.03%	28,403.85	28,411.50
Nifty Healthcare	-0.08%	14,699.00	14,711.35
Nifty Banks	-0.10%	59,011.35	59,069.20
Nifty Realty	-0.20%	883.15	884.90
Nifty India Digital	-0.23%	9,587.55	9,609.35
Nifty Mobility	-0.24%	22,893.35	22,947.50
Nifty IT	-0.31%	38,572.30	38,691.60
Nifty Consumer Durables	-0.52%	36,823.70	37,017.80
Nifty PSU Banks	-0.84%	8,287.45	8,357.30

Data Source: NSE

For the week, 10 sectors gave positive returns, while 10 gave negative returns. However, 16 out of 20 sectors moved less than 1% during the week, showing lacklustre markets. Defence, Metals, CPSE, and Chemicals saw gains; while PSU Bank, Consumer Durables, and IT were under pressure. Only 4 sectors gained over 1%; but no sector fell over 1%.

While defence gained on hopes of fresh government orders; Metals and Chemicals were more of a China play. There was selective buying in select PSU sectors ahead of sops expected in the Union Budget. PSU banks, consumer durables, and IT had rallied in recent weeks, and the fall this week looks more like a normalization for these sector returns.

Average returns of the 20 sectors stood at +0.49%. The top 5 sectors delivered 2.00% returns, while top 10 sectors gave returns of 1.23%. Bottom 10 sectors delivered -0.25%, showing a rather distributed market. Here is a quick recap of the week gone by.

WEEK THAT WAS; THE GOOD, THE BAD, THE UGLY

On the positive side, RBI infusion of $32 Billion into money markets in January 2026 is likely to keep markets stale and liquid. The core sector bounce to 1.76% is positive, but October had dipped into negative zone. It was RBI intervention that kept the rupee bears at bay during the week. More than ₹1.10 Trillion of big IPOs ready for launch in 2026.

On the downside, the strong US growth is likely to slow negotiations on the Indo-US trade deal. The relentless rally in spot gold and spot silver is indicative of jitteriness in the market and preference of safe havens. FPI flows continued to be under pressure and 2025 marks heavy secondary market net selling in three out of the last four calendar years.

STOCK MARKET TRIGGERS FOR COMING WEEK TO JANUARY 02, 2025

Here are key triggers that will influence stock markets next week.

• The big focus for the markets in the coming week will be the IIP data, with focus largely on the manufacturing IIP. Construction related sectors are expected to boost IIP growth in November to above 2.70% recorded in October 2025 in terms of IIP growth.
• With the rapid rise in the cumulative fiscal deficit in FY26, the focus will be on the November (8-month) update of fiscal deficit. There are already doubts of whether the government can hold fiscal deficit at 4.4% of GDP for FY26, ahead of Budget 2026.
• A key input in the coming week will be the minutes of the Federal Open Markets Committee (FOMC). With high unemployment at 4.6%, but robust GDP growth at 4.3%, rate cuts in January have elicited mixed responses. MPC minutes can give clarity!
• With a new calendar year starting off, the focus shifts to FPI allocations in the new year as well as the IPO calendar for the next year. There are mega issues of close to ₹1 Trillion lined up already for next year, including big names like Jio, NSE, Zepto etc.
• Key global data points. Pending Home Sales, Crude Stocks, Jobless Claims, Fed Balance Sheet, Manufacturing PMI, Construction Spending (US). PMI, M3 Money Supply, Private Sector Loans (EU); Bank of Japan Summary of Opinions (Japan); HPM, PMI (UK); and Composite PMI (China).

What does this mean for Nifty and Sensex levels in the coming week to January 02, 2026.

PARTING THOUGHTS ON NIFTY AND SENSEX LEVELS

VIX fell from 9.68 levels to 9.15; even touching a low of 9.02 for the week. This is normally a level where the Nifty shows a structural bounce.

• Nifty closed at 26,042 Spot. Nifty has immediate support at 25,986 and major support at 25,850. Immediate resistance is at 26,121 and later at 26,257. Nifty remains a Long Trade, unless it breaks below 26,004 with volumes. Shorts only below that!
• Sensex closed at 85,041 Spot. Sensex has immediate support at 84,860 and major support at 84,419. Immediate resistance is at 85,301 and later at 85,741. Sensex remains a Long Trade, till it breaks below 84,980 with volumes. Shorts only below that!

The stock markets next week will be predicated on the extent of RBI support to the rupee; and any weakness beyond ₹90/$ will impact stock market sentiments too.