Indian stock markets enter consolidation phase ahead of New Year

New Delhi: With liquidity conditions remaining muted and key macro cues awaited, the Indian markets are likely to stay range-bound in the near term amid consolidation ahead of New Year, analysts said on Saturday.

Market sentiment this week was shaped by a combination of domestic macroeconomic indicators and global developments.

India concluded a comprehensive Free Trade Agreement (FTA) with New Zealand, strengthening its Indo-Pacific engagement and export diversification strategy. On the macro front, growth across the eight core infrastructure sectors slowed sharply to 1.8 per cent in November, highlighting near-term moderation in industrial momentum.

“Foreign Institutional Investors (FIIs) remained net sellers throughout the week, reversing the brief inflows seen in the previous week. Additionally, stable currency movements, record highs in bullion prices, and holiday-thinned participation contributed to a mixed trading environment,” said Ajit Mishra–SVP, Research, Religare Broking Ltd.

The upcoming week marks the transition into calendar year 2026 and is likely to witness heightened volatility due to the December F&O expiry.

Key domestic data points to track include Industrial Production data for November, government budget value figures, external debt statistics, and the final HSBC Manufacturing PMI reading, said market experts.

Globally, markets will closely monitor US macroeconomic cues, including the FOMC minutes and updates on the Federal Reserve’s balance sheet. These developments could influence near-term expectations around growth, liquidity, and global risk sentiment.

According to a Bajaj Broking note, Nifty formed a bearish candlestick pattern with a lower high and a lower low signalling profit booking after recent up move.

Index on expected lines is seen consolidated in a range amid stock specific action. In the coming week index to extend the last four weeks consolidation in the broad range of 25,700-26,300. A clear breakout or breakdown will determine the next directional move, said the note.

A breakout above 26,300 will open further upside towards 26,500 levels in the coming weeks, it added.
IANS