Indian shares finished the week a bit higher, even though many investors were cashing in profits and trading volumes were thin.
Weekly market snapshot
The Nifty 50 rose 0.3% for the week, ending at 26,042, ending a three‑week slide. The Sensex also turned positive, up 0.13% to close at 85,041.45, snapping a two‑week decline.
Why the rally was limited
Higher‑level profit‑booking is draining momentum. Foreign portfolio investors (FPIs) kept selling even when the market rallied, and a delayed US‑India trade deal added disappointment.
Sector highlights
- Metals led gains, up about 2.3%, boosted by copper and zinc price moves. Companies like Hindustan Zinc and Vedanta could benefit from a strong silver rally.
- Capital goods and utilities each posted near‑1% weekly gains.
- Consumer durables, banking and realty lagged as investors took profits.
Global backdrop
Indian indexes lagged their Asian peers. Taiwan’s Taiex and South Korea’s KOSPI each jumped nearly 3% during the week. In Europe, the UK’s FTSE 100 and France’s CAC 40 fell by 0.3% and 0.6% respectively.
Looking ahead
Next week may stay quiet. US markets will be closed on New Year’s Day, which often reduces global cues and keeps FPIs on the sidelines. Historically, trading slows in the holiday stretch, leading to range‑bound moves unless a major trigger appears.
Potential catalysts include:
- Early‑January auto‑sales data, which could lift auto‑maker stocks.
- Credit‑growth figures that may spark activity in financial stocks.
- India’s industrial and manufacturing output, the manufacturing PMI, and the US Federal Open Market Committee minutes.
The India VIX is near its 52‑week low, indicating low expected volatility. Both cash and derivatives markets are likely to see limited participation for the near term.
Takeaway
While the week ended with modest gains, the lack of strong fundamentals and thin liquidity mean the market could stall or reverse quickly. Keep an eye on upcoming data releases and be ready for short‑term swings.
Remember, this is perspective, not a prediction. Do your own research and consider your risk tolerance before making any investment decisions.