Indian Stock Market Next Week, 22–26 Dec 2025: Nifty, Sensex Likely to Consolidate with Buy-on-Dips Strategy

Indian benchmark indices are expected to trade cautiously in the week ahead, with Nifty likely to remain range-bound between 25,700 and 26,300, while Sensex may oscillate near 84,500-85,200 levels. Investors are expected to follow a buy-on-dips strategy, with short-term momentum supported by strong technical support zones around the 55-day EMA for Nifty and Bank Nifty.

Stock Market Weekly Prediction For December 22-26, 2025: Key Triggers To Drive Market Sentiment This Week

Stock market action will be guided by global cues, U.S.-India trade negotiations, foreign fund flows and sectoral performances. Overall, the trend is expected to remain sideways to positive, with selective buying near support and cautious profit booking near resistance.

Indian benchmark indices extended their corrective phase for the third consecutive week, with the Nifty50 declining by 0.31% and the Sensex easing around 0.40%, closing at 25,966.40 and 84,929.36, respectively.

Sectoral performance during the week was mixed. PSU banks, IT, metals, and capital goods stocks outperformed, while media, private banking, and infrastructure stocks underperformed.

US-India Trade Negotiations

Lingering uncertainty surrounding U.S.-India trade negotiations, coupled with muted U.S. macroeconomic data, weighed on global risk appetite and investor sentiment. Despite the cautious mood, value buying at lower levels helped the indices recover from their weekly lows, limiting the extent of downside.

Rupee at All-Time Low

On the currency front, the Indian rupee briefly touched an all-time low of 91.07 against the U.S. dollar, reflecting global dollar strength and capital outflows. However, potential intervention by the Reserve Bank of India stabilised the rupee, allowing it to close comfortably below the key psychological mark of 90.

FII Inflows

Foreign institutional investors (FIIs) remained net sellers for the eighth consecutive week, offloading equities worth Rs. 252 crore. Meanwhile, domestic institutional investors (DIIs) provided strong support, recording net inflows of Rs. 12,062 crore.

Bank of Japan Raise Interest Rates By 25 bps

Global monetary developments also added to market caution. The Bank of Japan raised its key policy rate by 25 basis points to 0.75% at its December 19, 2025 meeting, marking the highest interest rate level in nearly three decades. This underscores the BOJ's continued shift toward policy normalization after years of ultra-loose monetary conditions.

Nifty Weekly Prediction (22-26 December 2025)

Nifty witnessed volatile price action last week but showed signs of stability toward the end. The index has formed a double bottom pattern on the daily chart, signaling a potential reversal.

"Strong buying interest near the 55-day EMA, around 25,700-25,750, continues to act as a key support zone. As long as the index sustains above this level, the outlook remains constructive. On the upside, resistance is seen near 26,050, with a sustained move above this level likely to attract further buying toward 26,300," said Dr. Ravi Singh, Chief Research Officer at Master Capital Services Ltd.

Dr. Singh recommends a buy-on-dips strategy for the week ahead, noting that "closing above the 21-day EMA reinforces the possibility of a bottoming formation."

Bank Nifty Weekly Outlook

Bank Nifty ended the week with a 0.54% decline, marking its second consecutive weekly fall. The index is trading near its 21-day EMA while remaining above the 55-day EMA, reflecting underlying strength. Dr. Singh said, "Dips around the 58,600-58,700 zone are witnessing buying interest, highlighting strong demand at these levels. However, a decisive breakdown below this support could trigger further selling toward 58,200."

Resistance for Bank Nifty is placed near 59,500-59,600, with a sustained move above potentially opening the path toward the 60,000 mark. Overall, the index is expected to trade sideways to positive, favoring a buy-near-support and sell-at-resistance approach.

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