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Indian Stock Market Ends Week Positive: What Drove the Gains Amid Holiday Lull?

Indian equity markets managed to close a holiday-shortened week in positive territory overall. The week began with a bullish tone but lost steam, ending with a slight dip on Friday. Analysts point to expectations of strong domestic demand and potential Federal Reserve policy easing as key drivers for the weekly gain. However, trading was range-bound due to a year-end lull and caution ahead of the upcoming earnings season.

Key Points: Indian Stock Markets End Holiday Week Positive on Domestic Demand Hopes

  • Markets started bullish but momentum faded as the week progressed, ending range-bound
  • Sensex closed Friday at 85,041.45, down 0.43%, with Nifty also slipping
  • Analysts cite year-end lull, fading Santa rally hopes, and caution ahead of earnings
  • Nifty remains above key 26,000-25,900 support, preserving the medium-term bullish structure
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Indian stock market ends holiday-shortened week in positive terrain

Sensex and Nifty closed the holiday-shortened week higher, buoyed by strong domestic demand hopes and Fed easing optimism, despite Friday's dip.

"Sectoral trends were mixed, marked by selective profit booking across most segments, while metals, FMCG, and media stocks offered notable resilience. - Vinod Nair, Geojit Investments"

Mumbai, Dec 27

Indian equity markets ended the week in a positive terrain, buoyed by expectations of stronger domestic demand, a favourable liquidity outlook and optimism over potential Fed policy easing in 2026, analysts said on Saturday.

The holiday-shortened week opened with a bullish undertone; however, momentum tapered off as the days progressed.

On Friday, Sensex closed at 85,041.45, slipping 367.25 points or 0.43 per cent. Nifty also ended in the red, falling 99.80 points or 0.38 per cent to settle at 26,042.30.

According to market watchers, the year-end lull kept trading largely range-bound, with hopes for a Santa Claus rally diminishing amid the absence of fresh catalysts, limited progress in US-India trade talks, and caution ahead of the upcoming earnings season.

"Sectoral trends were mixed, marked by selective profit booking across most segments, while metals, FMCG, and media stocks offered notable resilience," said Vinod Nair, Head of Research, Geojit Investments Ltd.

Nifty 50 ended the week at 26,042, continuing to respect its long-term rising channel on the daily chart. The index remains comfortably above the 20-day EMA cluster, preserving the medium-term bullish structure, said analysts, adding that as long as Nifty sustains above the 26,000-25,900 support zone, the overall bias remains positive.

On the domestic front, RBI's liquidity interventions, such as open market operations and a USD/INR buy-sell swap, helped stabilise the rupee, though persistent FII outflows continued to weigh on sentiment.

Meanwhile, gold advanced on safe-haven demand, while crude prices hovered near multi-year lows, though U.S. steps to tighten pressure on Venezuelan oil shipments could exert upward pressure in the near term

Looking ahead, market sentiment is likely to stay cautious as investors brace for the upcoming earnings season while remaining attuned to global developments and currency movements, said analysts.

Attention will also turn to next week's data releases, including India's industrial and manufacturing output figures, manufacturing PMI, and the US FOMC minutes, said Nair.

- IANS

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Reader Comments

S
Sarah B
Interesting to see the mixed signals. FII outflows are a persistent headache, but RBI's steps to stabilise the rupee are crucial. The resilience in FMCG stocks makes sense - essentials always find buyers even in uncertain times.
V
Vikram M
Year-end lull is typical. Smart investors use this time to review their portfolio for the new year. The focus should be on companies with strong domestic demand stories, as the article mentions. Global factors will keep causing volatility.
R
Rohit P
Honestly, these small weekly gains and losses don't matter much for a long-term investor like me. I'm more concerned about the lack of progress in US-India trade talks. That's a bigger catalyst for growth than a Santa Claus rally!
P
Priya S
Good to see metals and media stocks showing strength. Maybe there's some rotation happening. The PMI data next week will be key to gauge the actual health of our manufacturing sector. Fingers crossed for a good number.
M
Michael C
As an observer, the Indian market's ability to stay in a "positive terrain" amidst global headwinds and FII selling is impressive. It speaks to the underlying strength of the domestic economy. The medium-term structure still looks bullish.

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