No Santa rally as Nifty, Sensex open lower on Friday; Experts say Union Budget, trade deal will be triggers in 2026

MUMBAI: The domestic benchmark equity indices opened lower on Friday, signalling the absence of a traditional Santa rally in the Indian markets amid weak momentum and continued foreign fund outflows. The Nifty 50 index opened at 26,121.25, slipping marginally by 20.85 points or 0.08 per cent, while the BSE Sensex began the session at 85,225.28, declining by 183.42 points or 0.21 per cent.

Market experts attributed the subdued opening to persistent selling by foreign investors and thin year-end trading volumes. Banking and Market expert Ajay Bagga said, “Indian markets are pointing to a weak start. FPIs have been net sellers on each of the last three days. With year-end volumes expected to be low, the weak momentum in Indian markets suggests there will be no Santa rally”.

“On Wednesday, all sectors except media and metals closed down. This morning’s cues are also weak. The focus will now shift to three big catalysts for 2026. The Union Budget 2026, which will see a pre-Budget surge in industrials, railways, and defence stocks in anticipation, will also be followed by further FTA talks with the EU and US, and finally, the earnings season by mid-January. Earnings are expected to show an uptick, and markets will start moving in anticipation of this”, he said.

Despite the current sluggishness, Indian markets have shown resilience in the fourth quarter of calendar year 2025. For Q4 CY2025, Indian equities have remained broadly on par with both emerging markets (EMs) and developed markets (DMs), even amid the sharp depreciation of the Indian rupee in December.

Experts believe momentum is gradually shifting upward and that the combined impact of the Budget, FTAs, and earnings could lead to a strong first quarter of CY2026 for Indian stocks. For now, markets are winding down a disappointingly slow year, with hope intact but momentum still weak.

Fund flow data for the cash market on December 24 showed FPIs selling shares worth Rs 1,721.3 crore, while domestic institutional investors (DIIs) provided support with net purchases of Rs 2,381.3 crore.

Ponmudi R, CEO of Enrich Money, said, “On the daily timeframe, Nifty remains in a consolidation phase within a broader uptrend. The index continues to hold firmly above the 20-day EMA at 26,073 and the psychologically important 26,000 mark, keeping the short-term structure constructive. Price action since mid-year continues to reflect higher highs and higher lows, with the index trading comfortably above rising moving averages, indicating that the broader trend remains intact despite recent consolidation”.

In the broader market, most indices traded in the red. The Nifty Smallcap 1000 was the sole gainer, rising 0.17 per cent, while the Nifty 100 slipped 0.06 per cent and the Nifty Midcap 100 declined 0.04 per cent.

On the sectoral front, the Nifty Media, Nifty Metal and Nifty Pharma indices opened in the green. In contrast, the Nifty IT index opened lower by 0.14 per cent, while Nifty FMCG, auto and PSU bank indices were also flat to negative. (ANI)