Dalal Street This Week: US GDP, FII flow, rupee move, China's NPC Standing Committee among 10 key factors to watch

The market will remain shut on December 25 for Christmas.

The market ended a range-bound week with moderate losses, as the Nifty 50 fell 0.3 percent for the week ended December 19, extending its decline for a third consecutive week. Sentiment remained cautious amid persistent FII outflows, rupee depreciation, global uncertainties, and delays in the India-US trade deal.

However, Friday’s broad-based gains rekindled hopes of a possible Santa rally, supported by a softer US CPI print, FII buying, and rupee appreciation over the past three sessions, subdued oil prices, and bargain hunting.

In the coming truncated week starting from December 22, the market is expected to be positive but with a cautious tone, focusing on the quarterly US GDP & PCE numbers, China's NPC Standing Committee meeting, rupee movement, FII flow, and the VIX.

The Nifty 50 declined 81 points (0.31 percent) to 25,966, and the BSE Sensex dropped 338 points (0.4 percent) to 84,929, while the Nifty Midcap and Smallcap 100 indices closed flat with a positive bias due to Friday's rally.

According to Vinod Nair, Head of Research at Geojit Investments, the markets are likely to maintain a cautiously positive bias but remain highly sensitive to global cues.

"Key drivers going forward include comments from the global central banks for the 2026 policy trajectory. While sentiment remains constructive, near-term volatility may persist amid uncertainty over trade deal timelines and INR stability," he said.

Siddhartha Khemka, the Head of Research, Wealth Management at Motilal Oswal Financial Services, expects the markets to continue their recovery while trading within a broader range, supported by improving foreign institutional investor flows, a marginal recovery in the rupee, and supportive global cues.

The market will remain shut on December 25 for Christmas.

Here are 10 key factors to watch out for this week:

US GDP Data

Globally, the estimates for the quarterly US GDP numbers, which are scheduled to be released on December 23, are one of the key factors to focus on this week and also an important piece of data for the US central bank for making further interest rate decisions. Most economists expect the US economy to grow in the range of 3-3.5 percent, against 3.8 percent growth recorded in the second quarter of 2025.

Further, the estimates for PCE (Personal Consumption Expenditure) prices and real consumer spending for Q3-2025 releasing on the same date, will also be watched. Durable goods orders for October, and industrial production numbers for October-November, as well as weekly US jobs data, will also be in focus.

Global Economic Data

Apart from US economic releases, the September quarter GDP growth numbers from the United Kingdom on December 22 will also be watched. Further, the focus will also be on the Bank of Japan's recent monetary policy meeting minutes, monthly housing starts, unemployment rate, retail sales, construction orders, and Tokyo CPI data from Japan.

National People's Congress Standing Committee (China)

The market participants across asset classes globally will also keep an eye on the six-day meeting of the National People's Congress Standing Committee, China's top legislature, from December 22-27.

"According to the proposed session agenda, a draft law on childcare services and another on activities and environmental protection in Antarctica will be submitted to the session for the first time. Also on the agenda will be a draft environmental code, a draft law aimed at promoting ethnic unity and progress, a draft law on national development planning, and draft revisions to the foreign trade law, among others," the China Daily news report said, adding the lawmakers will also review a draft decision concerning the fourth session of the 14th NPC, a report on the rectification of problems discovered through auditing central budget execution and other fiscal revenues and expenditures for 2024.

Domestic Economic Data

Back home, the infrastructure output numbers for November will be announced on December 22, followed by RBI market borrowing auctions scheduled on December 23.

Bank loan & deposit growth for the fortnight ended December 12, and foreign exchange reserves for the week ended December 19 will also be released this week, December 26.

FII Flow

The market participants will closely watch the FIIs (Foreign Institutional Investors) numbers, which turned positive in last three consecutive sessions (buying nearly Rs 3,600 crore), playing a supportive role for the equity markets sentiment, though they remained net sellers for the week to the tune of Rs 1,366 crore, taking the total net outflow for current month to Rs 19,857 crore.

Most experts are hopeful for the FIIs coming back to India next year once the India-US trade deal gets announced, as they believe the domestic factors like earnings and economic growth, especially after several measures taken by the government, along with interest rate cuts by the RBI is expected to strengthen in the new year and FY27 earnings numbers are likely to be in double-digits.

On the other side, DIIs (Domestic Institutional Investors) continued lending strong support to the market, buying Rs 12,062 crore worth shares for the week and Rs 52,032 crore for the current month.

Meanwhile, the Indian rupee, which turned out to be the worst-performing Asian currency this year, has also seen appreciation in the last three straight sessions, falling from its record low of 91.07 and closing at 89.55 against the US dollar on Friday, up 1.67 percent in three days, though for the week it weakened by 1.1 percent.

The US dollar index also traded higher in the last three sessions, and closed 0.33 percent higher for the week at 98.718.

IPO Action

The primary market activity will remain strong even in the holiday-shortened week, with 11 IPOs worth Rs 755 crore opening for public subscription and five new companies available for trading on the bourses.

Gujarat Kidney & Super Speciality is the only public issue worth Rs 250.8 crore from the mainboard segment opening on December 22 with price band of Rs 108-114 per share, while the remainder 10 IPOs (initial public offerings) - Dachepalli Publishers, Shyam Dhani Industries, Sundrex Oil, EPW India, Bai Kakaji Polymers, Dhara Rail Projects, Apollo Techno Industries, Admach Systems, Nanta Tech, and E to E Transportation Infrastructure - will be from the SME segment.

Phytochem Remedies will close its Rs 38.2-crore IPO on December 22.

Meanwhile, a total of five companies, KSH International (the only company from the mainboard segment), Neptune Logitek, Global Ocean Logistics India, MARC Technocrats, and Phytochem Remedies, will be available for trading on the bourses in the coming week.

Technical View

Technically, the Nifty 50 showed healthy improvement last Friday after a gap-up opening and recouped losses of the previous three sessions, with double the volume over the previous session. The index climbed above short-term moving averages on a closing basis and tested the midline of Bollinger bands intraday (very close to 26,000).

Even the index broke above the falling resistance trendline on Friday, reviving the hope for further gains or a possible Santa rally. If the index convincingly reclaims and sustains 26,000, the 26,200-26,300 can't be ruled out this week; however, the 25,800-25,700 is expected to be a crucial support area, experts said. On a weekly basis, the index has not broken down its previous week's closing low and remained in the previous week's range, forming a Doji candle on the weekly charts, indicating indecision.

F&O Cues

The weekly options data indicated that the Nifty 50 is likely to face resistance at the 26,000-26,200 zone, with support at the 25,900-25,800 levels.

On the Call side, the 26,000 strike holds the maximum Call open interest, followed by the 26,200 and 26,100 strikes, with the maximum Call writing at the 26,200, 26,400 and 26,250 strikes, while the maximum Put open interest was seen at the 25,900 strike, followed by the 25,800 and 26,000 strikes, with the maximum Put writing at the 25,900, 25,950 and 26,000 strikes.

India VIX

Meanwhile, the fear index, India VIX, extended its downtrend for the fourth consecutive week, falling to an all-time closing low of 9.52, down 5.79 percent for the week and over 30 percent in the past four weeks. It remained below all key moving averages, providing healthy comfort for the bulls and signalling low uncertainty going ahead, but at the same time, sustaining near the lower zone increased the possibility of sharp market moves.

Corporate Action

Here are key corporate actions taking place this week:

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