Nifty, Sensex enter consolidation zone before New Year
2 min read
Indian equity markets are expected to remain range-bound in the short term as liquidity conditions stay subdued and investors await critical macroeconomic triggers. Analysts suggest this consolidation phase will likely persist heading into the New Year.
Domestic economic indicators and international developments influenced market trends throughout the week. Notably, India finalized a Free Trade Agreement (FTA) with New Zealand, reinforcing its Indo-Pacific economic partnerships and export diversification efforts. Meanwhile, core infrastructure sector growth decelerated sharply to 1.8% in November, signaling tempered industrial activity.
Foreign Institutional Investors (FIIs) resumed selling pressure after briefly turning net buyers the prior week. Currency stability, record-high precious metal prices, and reduced trading volumes amid holiday seasons contributed to mixed market dynamics.
The week ahead holds key domestic data releases, including Industrial Production figures for November, government budget statistics, external debt updates, and the final HSBC Manufacturing PMI reading. Globally, focus remains on US macro cues such as FOMC meeting minutes and Federal Reserve balance sheet movements, which may sway risk sentiment and growth outlooks.
Technical analysis indicates Nifty formed a bearish candlestick pattern this week, reflecting profit-taking after recent gains. The index is anticipated to consolidate between 25,700 and 26,300, with a decisive breakout beyond 26,300 potentially triggering upward momentum toward 26,500 levels. Conversely, sustained weakness could prompt a downside reversal.
(With inputs from IANS)
