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Markets manage to eke out modest gains in holiday shortened week
Dec-26-2025

Indian markets managed to eke out modest gains in holiday shortened week on account of bargain hunting after two consecutive weeks of losses, and optimism over India-US trade deals. However, gains got trimmed in last two sessions as sentiments remained fragile amid low volumes due to year-end and Christmas holiday. Capital withdrawals from foreign investors also dented sentiments.

Some of the major developments during the week are:

India deepens Indo-Pacific engagement with conclusion of FTA with New Zealand: India has marked a major economic and strategic milestone in its engagement with the Indo-Pacific region, with conclusion of a comprehensive, balanced and forward-looking Free Trade Agreement (FTA) with New Zealand.

November sees slower growth in eight key infrastructure sectors output: Government data showed the output of eight key infrastructure sectors grew at slower pace of 1.8% in November 2025 over 5.8% in same month last year, amid dip in production of crude oil, natural gas, refinery products, and electricity.

India, Canada to start discussions on ToR to restart negotiations for FTA: Commerce and Industry Minister Piyush Goyal has said with an aim to formally start the negotiations for FTA, India and Canada will soon start discussions on the Terms of Reference (ToR).

Revised ITR filings cross 15 lakh mark for AY 2025-26: The Central Board of Direct Taxes (CBDT), the apex policy making body concerning direct taxes, has said that more than 15 lakh revised Income Tax Returns (ITRs) have been filed for the ongoing assessment year (AY) 2025-26.

Govt plans to use online, e-commerce data in new CPI series: In a bid enhance accuracy, reliability and overall quality of the consumer price index (CPI), the government plans to include online sources as well as e-commerce platforms to compute retail inflation.

BSE movement for the week

The Bombay Stock Exchange (BSE) Sensex surged 112.09 points or 0.13% to 85,041.45 during the week ended December 26, 2025. The BSE Midcap index gained 173.74 points or 0.37% to 46,721.04 and Smallcap index surged 517.91 points or 1.02% to 51,318.68. On the sectoral front, S&P BSE Metal was up by 815.50 points or 2.34% to 35,658.63, S&P BSE PSU was up by 349.90 points or 1.76% to 20,264.91, S&P BSE Capital Goods was up by 607.54 points or 0.91% to 67,141.56 were the top gainers, while S&P BSE Consumer Durables was down by 407.41 points or 0.68% to 59,932.90, S&P BSE Realty was down by 18.76 points or 0.27% to 6,851.34 and S&P BSE BANKEX was down by 149.96 points or 0.23% to 65,990.69 were the top losers on the BSE.

NSE movement for the week

The Nifty increased 75.90 points or 0.29% to 26,042.30. On the National Stock Exchange (NSE), Nifty IT was down by 119.30 points or 0.31% to 38,572.30, and Nifty Mid Cap 100 increased 4.30 points or 0.01% to 60,314.45, while Nifty IT was down by 119.30 points or 0.31% to 38,572.30, and Bank Nifty was down by 57.85 points or 0.10% to 59,011.35.

FII transactions during the week

Foreign Institutional Investors (FIIs) were net sellers in equity segment in the week, with gross purchases of Rs 51,972.81 crore and gross sales of Rs 52,522.48 crore, leading to a net outflow of Rs 549.67 crore. They also stood as net sellers in the debt segment with gross purchases of Rs 6,276.79 crore against gross sales of Rs 10,951.55 crore, resulting in a net outflow of Rs 4,674.76 crore. In hybrid segment, FIIs stood as net sellers, with gross purchases of Rs 248.18 crore and gross sales of Rs 1,107.35 crore, leading to a net outflow of Rs 859.17 crore.

Industry and Economy

With focus shifting towards customs duty rationalisation and procedural simplification in the coming Budget, India has overhauled its tax regime in 2025 with sharp cuts in Goods and Services Tax (GST) rates and a higher income tax exemption limit. In the new year 2026, the over six-decade-old current Income Tax Act, 1961 will be replaced by the new simplified Income Tax Act, 2025, which will come into effect from April 1. Also, two new laws -- one to levy additional excise duty on cigarettes and another to levy cess on pan masala over and above GST rates -- will be implemented on a date decided by the government. The government has rolled out tax reforms in 2025 with an aim to stimulating demand amid a challenging global economic environment. 

Outlook for the coming week

Indian equity benchmarks ended the passing week marginally in green amid optimism about India-US trade deal. Commerce and Industry Minister Piyush Goyal said that India’s trade negotiations for a bilateral trade agreement with US are reached at advanced stage.

The coming week marks the start of new month and also the start of New Calendar Year 2026. The domestic markets may see some volatility due to F&O December series expiry slated during the week. In economic releases, market participants will be watching Industrial Production data, which going to be out on December 29. On the last day of 2025, investors would be looking forward to Government Budget Value data. HSBC Manufacturing PMI Final data going to be out on January 02.

On the global front from the US, traders in a holiday truncated week, will be eyeing some important macro-economic data, starting with Dallas Fed Services Index on December 30, followed by FOMC Minutes, Initial Jobless Claims, Chicago PMI, and Baker Hughes Oil Rig Count on December 31, S&P Global Manufacturing PMI Final on January 02, and Fed Balance Sheet on January 03.

Top Gainers 

  • Shriram Finance up by 11.11% was the top gainer on Nifty for the week - Shriram Finance gained investors’ attention after its Board approved MUFG Bank’s acquisition of 20% stake in the company on a fully diluted basis for an investment of Rs 39,618 crore (around $4.4 billion) in the company. This collaboration combines the company’s established domestic franchise and extensive distribution network with MUFG Banks’s global expertise and financial strength.
  • Trent up by 5.94% was another top gainer on Nifty for the week - Trent traded higher as bargain hunters fuelled recovery following the recent losses made by the stocks. The company had announced its quarterly result for Q2FY26, which fell short to match investors’ expectations. The company had reported 11.25% rise in its consolidated net profit at Rs 376.86 crore for as Q2FY26 compared to Rs 338.75 crore for Q2FY25.

Top Losers 

  • Sun Pharmaceutical Industries down by 4.09% was the top loser of the week on Nifty - Sun Pharma came under pressure after its unit -- Taro Pharmaceutical Industries initiated recall of over 17,000 units of an antifungal medication in the US due to manufacturing issues. The company is recalling the affected lot due to Failed Impurity/Degradation specifications. The company initiated the Class II nationwide recall on December 9 this year.
  • Asian Paints down by 1.41% was another top loser of the week on Nifty - Asian Paints traded lower as some of the paints stocks including Asian Paints remained under pressure on rising prices of crude oil as it is a key raw material for paints. WTI Crude Oil hovered near two-week highs amid rising US-Venezuela tensions.

Technical viewpoints

During the week, CNX Nifty touched the highest level of 26,236.40 on December 24 and lowest level of 25,880.45 on December 26. On the last trading day, the Nifty closed at 26,042.30 with weekly gain of 75.90 points or 0.29 percent. For the coming week, 25,869.70 followed by 25,697.10 are likely to be good support levels for the Nifty, while the index may face resistance at 26,225.65 and further at 26,409.00 levels.

US Market

The U.S. markets traded higher during the week after a report released by the Commerce Department showed the U.S. economy grew by much more than expected in the third quarter of 2025.

Some of the major developments during the week are:

U.S. economy grows much more than expected in Q3: Real gross domestic product spiked by 4.3 percent in the third quarter after surging by 3.8 percent in the second quarter. Street had expected GDP to jump by 3.3 percent.

Weekly jobless claims in U.S. dip more than expected: Initial jobless claims dipped to 214,000 in the week ended December 20 from the previous week's unrevised level of 224,000. Street had expected jobless claims to edge down to 223,000.

U.S. consumer confidence deteriorates for fifth straight month in December: The Conference Board said its consumer confidence index slid to 89.1 in December from an upwardly revised 92.9 in November.

Industrial production in U.S. rises 0.2% in November: The Fed said industrial production rose by 0.2 percent in November after edging down by 0.1 percent in October. Street had expected industrial production to inch up by 0.1 percent.

U.S. durable goods orders plunge 2.2% in October:  Durable goods orders tumbled by 2.2 percent in October after climbing by an upwardly revised 0.7 percent in September.

European Market

European markets witnessed some weakness during the passing week, as trading volumes were quite thin, and movements somewhat lackluster, with several markets remained closed on Thursday and Friday for Christmas and Boxing Day holidays.

Some of the major developments during the week are:

Italy current account surplus rises in October: The Bank of Italy reported that the current account surplus rose to EUR 3.5 billion in October from EUR 3.3 billion in the corresponding month last year.

German producer prices fall most in 19 months: The data from Destatis showed that producer prices for industrial products dropped 2.3 percent year-on-year in November, faster than the 1.8 percent fall in the prior month.

UK Q3 GDP growth confirmed at 0.1% in the third quarter: The Office for National Statistics said that gross domestic product grew by unrevised 0.1 percent sequentially, following the second quarter's 0.2 percent expansion.

Spain GDP growth slows as estimated in the third quarter: Gross domestic product advanced 0.6 percent on a sequential basis, slower than the 0.7 percent growth registered in the second quarter. 

Spain producer prices fall for first time in 3 months: The statistical office INE said that producer prices fell 2.5 percent on a yearly basis in November, in contrast to the 0.8 percent increase in October.

Asian Market

Asian markets traded higher during the passing week in the backdrop of renewed optimism around AI-related shares. Expectations of further monetary easing by the Federal Reserve also supported sentiment.

Some of the major developments during the week are:

Core inflation in Japan's capital eases more than forecast: Core inflation in Japan's capital weakened more-than-expected at the end of the year but it remained firmly above the central bank's 2% target. 

Bank of Japan raises key policy interest rate: The Bank of Japan raised its key interest rate by a quarter-point to 0.75 percent from 0.5 per cent, the highest level in three decades, and also hinted at further rate hikes.

Japan industrial output falls more than estimated: Japan’s industrial production dropped 2.6% month-on-month in November 2025, reversing a 1.5% increase in the previous month and missing market expectations of a 2.0% decline.

Japan’s retail sales rise 1.0% in November: Japan retail sales logged an annual growth of 1.0 percent in November after rising 1.7 percent in October. Nonetheless, the pace of increase was better than forecast of 0.9 percent.

China keeps benchmark lending rates steady: The People's Bank of China kept its one-year and five-year Loan Prime Rate unchanged at 3% and 3.5% respectively, for the seventh consecutive month.
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