Indian equity benchmarks are expected to trade in a narrow range on Tuesday, December 16, 2025, as investors remain cautious ahead of crucial U.S. macroeconomic data and ongoing global uncertainties. The Sensex and Nifty are likely to see selective buying at lower levels, but broader market sentiment may stay restrained due to persistent foreign fund outflows, a weakening rupee, and lack of clarity on the proposed India–U.S. trade agreement.
Markets End Slightly Lower After Volatile Session
On Monday, Indian equities ended marginally lower after recovering from early losses, reflecting a cautious global risk environment. The BSE Sensex slipped 54.30 points, or 0.06%, to close at 85,213.36, while the Nifty 50 declined 19.65 points, or 0.08%, to settle at 26,027.30.
Despite initial selling pressure, indices managed to close near the day’s highs, indicating buying interest at lower levels. However, sustained upside momentum remained elusive as investors refrained from taking aggressive positions ahead of key global data releases.
Global Cues: Focus on U.S. Inflation and Jobs Data
Market participants are closely watching a series of important U.S. economic indicators scheduled this week, including CPI inflation, non-farm payrolls, unemployment rate, retail sales, and manufacturing PMI. These data points are expected to provide clearer signals on global liquidity conditions and the Federal Reserve’s interest-rate trajectory for 2026.
Any surprise in inflation or employment figures could significantly impact global markets, including emerging markets like India, by influencing capital flows and risk appetite.
Commenting on market sentiment, Siddhartha Khemka, Head of Research, Wealth Management at Motilal Oswal Financial Services, said:
“Indian equity markets ended marginally lower on Monday, recovering from early losses to close near the day’s high amid a weak global risk environment. Persistent foreign investor selling and uncertainty around a potential U.S. trade deal continued to cap risk appetite.”
Sectoral Performance: Selective Buying Continues
Sectoral trends remained mixed, highlighting stock-specific action rather than broad-based participation.
- Gainers: PSU Banks, Media, IT, FMCG, and Consumer Durables rose between 0.3% and 1%
- Losers: Auto, Pharma, and Telecom stocks declined 0.5% to 1%
Among key indices:
- Nifty Media emerged as the top performer, gaining 1.8%
- Nifty FMCG advanced 0.6%, supported by defensive buying
- Nifty Auto slipped 1%, while Nifty Pharma fell 0.4%
The midcap index ended flat, while small-cap stocks edged up 0.2%, indicating resilience in broader markets despite benchmark pressure.
Rupee Hits Fresh Record Low
The Indian rupee weakened further, touching a fresh all-time low of 90.6 against the U.S. dollar, marking its third consecutive session of depreciation. A weaker rupee continues to weigh on market sentiment, particularly for sectors dependent on imports.
On the macroeconomic front, India’s trade deficit narrowed in November, supported by exports hitting their highest level in nearly three-and-a-half years, offering some relief amid currency concerns.
Strong Domestic Liquidity Provides Support
Despite global headwinds, domestic liquidity conditions remain robust. Mutual fund assets under management crossed ₹80 trillion in November, reflecting strong retail participation. SIP assets rose to ₹16.53 trillion, now accounting for more than 20% of total AUM, underlining sustained confidence in long-term investing even amid short-term volatility.
Nifty Outlook for December 16, 2025
According to Bajaj Broking Research, the Nifty has formed a bullish candlestick pattern, indicating buying demand at lower levels.
The brokerage noted:
“Nifty is currently placed near the falling trendline resistance around 26,080, which coincides with the 61.8% retracement of the previous decline. A decisive move above this level could open further upside toward 26,200–26,300 in the coming sessions.”
Key levels to watch:
- Immediate resistance: 26,080–26,100
- Upside targets: 26,200–26,300
- Key support: 25,700–25,800
In the near term, the Nifty is expected to trade within a broad range of 25,700–26,300.
Bank Nifty Outlook
Bank Nifty also displayed signs of consolidation, with buying interest emerging near the 20-day exponential moving average (EMA).
Bajaj Broking added:
“The index is testing trendline resistance around 59,500. A sustained move above this could lead to a retest of the all-time high near 60,100.”
- Support zone: 58,200–58,600
- Resistance: 59,500–60,100
- Upside potential on breakout: Up to 60,500
Market Strategy for Investors
Given the current environment, experts advise investors to remain selective, focus on fundamentally strong stocks, and avoid aggressive leveraged positions ahead of major global data. Defensive sectors such as FMCG and select IT stocks may continue to offer stability, while volatility is likely to persist in rate-sensitive sectors.