As the calendar year 2025 draws to a close, the Indian equity markets are poised for a quiet but decisive pause. With merely two trading sessions remaining before the onset of 2026, benchmark indices are expected to consolidate around current levels in the absence of significant fresh triggers, either from the domestic front or the global arena.
Year-End Consolidation Amid Light Volumes
The markets are entering this period of indecision after a challenging year marked by global trade tensions, persistent outflows from Foreign Institutional Investors (FIIs), and somewhat subdued corporate earnings growth. Despite these headwinds, the Indian bourses are on track to close the year with a respectable double-digit growth. The Nifty is likely to register gains of nearly 10% for the calendar year 2025.
Trading activity in the final two sessions is anticipated to remain light. Investors are seen preferring stock-specific exposure over broad-based bets due to a lack of strong near-term catalysts. Day-to-day sentiment continues to be swayed by global cues and developments in individual companies.
Ajit Mishra, Senior Vice President of Research at Religare Broking, noted that the broader market structure still lacks clear directional momentum. "We continue to maintain our consolidation view on the index, though the scheduled monthly expiry could lead to some intraday volatility," Mishra stated. He advised participants to stay selective, focus on sectors showing relative strength, and keep position sizes in check until a clearer trend emerges.
Derivatives Expiry to Set the Range for Nifty
All eyes are now firmly on the monthly derivatives expiry scheduled for December 30. Analysts expect the Nifty to trade within a defined range with a cautious bias, as technical indicators signal exhaustion at higher levels.
Sachin Gupta, Vice President of Research at Choice Equity Broking, pointed out that the index is confronting strong overhead resistance. "The Nifty is encountering stiff resistance in the 26,100–26,300 zone, limiting near-term upside," Gupta explained. He identified immediate support in the 25,830–25,700 band.
Derivatives data paints a clear picture of the expected expiry range, with heavy call writing observed at the 26,000–26,100 strikes and significant put writing around 25,900–25,800. Gupta highlighted that while FIIs remained net sellers for most of December, consistent buying by Domestic Institutional Investors (DIIs) prevented sharper declines. Given the potential for year-end and expiry-related volatility, he recommended traders adopt a sell-on-rise strategy, keep positions light, and prioritize capital preservation.
Echoing the technical perspective, Hrishikesh Yedve, AVP of Technical and Derivative Research at Asit C. Mehta Investment Intermediates Ltd, emphasized key levels. He suggested that as long as the index holds above 25,800, it is likely to consolidate between 25,800 and 26,325, with 26,200 and 26,325 acting as formidable resistance points in the short term.
Looking Ahead to 2026: A Focus on Value
While the final trading days of 2025 may remain muted, market analysts are turning an optimistic gaze toward the beginning of the new year. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, foresees a potential rally in the initial phase of 2026.
"A rally in the market in the early stage of 2026 is on the cards. Investors should give high weightage to value while deciding to invest," Vijayakumar advised. He cautioned against the irrational valuations seen in some recent Initial Public Offerings (IPOs) and the exuberance of new investors willing to buy at excessive prices.
As the curtain falls on 2025, the overarching message from market experts is unambiguous: maintain a selective approach, respect crucial technical support and resistance levels, and step into 2026 with a sharpened focus on fundamental valuations and prudent risk management, rather than being swept up by short-term market excitement.
