Bears Tighten Grip as Year-End Fatigue Hits Dalal Street

The Indian equity markets faced a wave of profit-booking on Friday, December 26, 2025, as the benchmark indices extended their losing streak. In today’s Market Analysis 26 Dec 2025, we observe that despite a resilient weekly performance, the daily candles reflected a lack of buying conviction at higher levels.

Market Open and Starting Behavior

The day began on a soft note following the Christmas holiday. Global cues were mixed to muted, with major Western markets still in a festive lull. The Nifty 50 opened slightly lower at 26,121.25, while the Bank Nifty started the session at 59,092.85.

Initial trades showed a brief attempt at a recovery as Nifty touched an intraday high of 26,139.35. However, this “dead cat bounce” was short-lived. Selling pressure in heavyweights like ICICI Bank and TCS quickly pulled the indices into the red. The starting behavior was characterized by low liquidity and “thin” order books, making the market susceptible to sudden swings even on moderate volumes.

Index Performance Table

Index	Open	High	Low	Close	Change (%)
Nifty 50	26,121.25	26,139.35	26,034.65	26,042.30	-0.38%
SENSEX	85,380.10	85,420.50	84,980.20	85,041.45	-0.43%
Bank Nifty	59,092.85	59,150.40	58,940.15	59,011.35	-0.25%
India VIX	9.19	9.39	9.02	9.12	-0.71%

Key Takeaways

• Three-Day Slide: This marks the third consecutive session where the benchmark indices have closed in the negative territory.
• Support at 26,000: The Nifty 50 managed to defend the psychological support level of 26,000, which remains a crucial pivot for the coming week.
• Sectoral Divergence: While IT and Financials dragged the market, Metal and Consumer Durables sectors showed relative outperformance.
• Volatility Remains Low: India VIX continues to hover near historic lows, suggesting that while the market is falling, there is no “panic” selling yet.

Reason Behind the Market Movement

The primary catalyst for the decline in today’s Market Analysis 26 Dec 2025 was widespread profit-booking. After a strong run-up earlier in the quarter, investors are choosing to “lock in” gains before the calendar year ends.

1. FII Exodus: Foreign Institutional Investors (FPIs) have remained net sellers throughout December. The lack of fresh global triggers meant there were no buyers to absorb the FII sell-off.
2. Muted Volumes: With many global fund managers on vacation, the “Santa Claus Rally” failed to materialize in the Indian context.
3. Q3 Earnings Anticipation: There is a growing sense of caution ahead of the Q3FY26 earnings season, which kicks off in January. High valuations are demanding even higher earnings growth, leading to “valuation jitters.”

Top Gainers and Losers

Nifty Top Gainers:

• Titan Company: +2.17% (Boosted by strong festive demand reports)
• Hindustan Copper: +4.10% (Copper prices surged globally)
• Hindalco: +1.00%
• Cipla: +0.75%

Nifty Top Losers:

• Shriram Finance: -1.37% (Profit booking after recent highs)
• Asian Paints: -1.40% (Concerns over raw material costs)
• TCS: -1.15% (Weakness in the global IT spending outlook)
• Bajaj Finance: -1.30%

Institutional Activity

Institutional flows provided a stark contrast today. While DIIs (Domestic Institutional Investors) attempted to provide a floor to the market, the persistent selling by FIIs eventually weighed the indices down.

• FIIs: Net Sellers of approximately ₹1,800 Crore (Estimated).
• DIIs: Net Buyers of approximately ₹2,400 Crore (Estimated).

The trend of “DIIs vs FIIs” continues to be the defining theme of the Indian market in late 2025.

Tomorrow Prediction (Monday, Dec 29, 2025)

As we look ahead to the final trading week of the year, the bias remains Sideways to Bearish. The Nifty 50 is currently oscillating in a range of 25,950 to 26,150.

A break below 26,000 on a closing basis could open the gates for a deeper correction towards 25,850. Conversely, for the bulls to regain control, the index must cross and sustain above the 26,150 mark. For Bank Nifty, the 58,800 level is the “line in the sand.”

Trading Strategy for Tomorrow

• For Aggressive Traders: Look for “Sell on Rise” opportunities near the 26,100–26,120 zone with a strict stop-loss at 26,160.
• For Conservative Investors: This is a “wait and watch” phase. Avoid fresh long entries until the Nifty convincingly clears the 26,200 hurdle.
• Sector Focus: Focus on Metals and Pharma as defensive bets if the broader market weakness continues.

Conclusion & Expert View

The Market Analysis 26 Dec 2025 concludes that the current phase is a healthy consolidation within a broader bull market. The dip to 26,042 is not a cause for alarm but rather a result of year-end liquidity adjustments. Experts suggest that as long as the structural supports of the Indian economy remain intact, these corrections should be viewed as “buying the dip” opportunities for long-term portfolios.

“The market is currently in a ‘Time Correction’ mode. We expect the indices to remain range-bound until the New Year, after which the focus will shift entirely to the upcoming Union Budget and Q3 results.” — Market Strategist View

FAQ Section

1. Is the market crash likely to continue on Monday?

Based on our Market Analysis 26 Dec 2025, it is not a “crash” but a consolidation. However, further weakness is possible if Nifty breaks the 26,000 support.

2. Why are IT stocks falling?

IT stocks are facing pressure due to cautious commentary from global peers regarding 2026 tech spending and profit-booking before the results in January.

3. What is the significance of the India VIX being so low?

A low India VIX (9.12) indicates low fear among participants. However, it also suggests complacency, which sometimes precedes a sudden spike in volatility.