IIP data to Rupee rate: Top five triggers for Indian stock market this week

Stock market next week: Both Indian indices - Sensex and Nifty - ended the session with solid gains on Friday, December 19, breaking a four-session losing run, supported by a steady rupee, encouraging global cues, and a Bank of Japan policy outcome that met expectations.

The Sensex climbed 448 points, or 0.53%, to end at 84,929.36, while the Nifty 50 advanced 151 points, or 0.58%, to settle at 25,966.40. Broader markets outperformed, with the BSE Midcap index surging 1.26% and the Smallcap index gaining 1.25%.

“Markets ended the week with marginal losses as mixed macroeconomic data, a depreciating rupee, and continued uncertainty over the timing of a potential India–US trade deal kept investor sentiment cautious. Selling pressure dominated most sessions; however, a recovery in the final trading day—driven by value buying and renewed interest from foreign portfolio investors (FPIs)—helped limit the downside, though benchmarks failed to close in positive territory. The Nifty declined 0.31% to 25,966, while the Sensex slipped 0.40% to 84,929, indicating a phase of consolidation after recent volatility,” said Ajit Mishra – SVP, Research, Religare Broking Ltd.

On the market outlook, Mishra said that the coming week marks the onset of the year-end festive period and will be holiday-shortened due to the Christmas break, which may keep trading volumes subdued.

He recommended investors to approach a cautious yet constructive method given the mixed macro backdrop and ongoing currency-related uncertainties.

“Participants may continue to focus on large caps and select large- cap midcaps, while favouring relatively stronger sectors such as private banking, autos, metals, and IT for long positions. Selective opportunities may also emerge in other sectors on a stock-specific basis. Risk management remains crucial in the holiday-shortened week—position sizes should be kept moderate, and a buy-on-dips strategy near key support levels is preferable to chasing momentum,” Mishra said.

Top triggers for the Indian stock market

IIP data

The stock market investors will closely be tracking India's industrial output data (IIP) for the month of November 2025 in the coming week. According to Ministry of Statistics & Programme Implementation, the release of the Index for November 2025 will be on 29 December 2025.

The IIP growth rate for the month of October 2025 was 0.4 percent, which was 4.0 percent in the month of September 2025. The slow growth in the month was attributed to less number of working days because of a number of festivals in the month including Dussehra, Dipawali and Chhath.

India-US trade deal

Prime Minister Narendra Modi’s government advanced sweeping policy reforms in the last parliamentary session of the year, aiming to strengthen the economy amid global trade pressures.

During one of the busiest winter sessions in recent times, Parliament cleared legislation to permit private sector entry into the nuclear industry and allow 100% foreign ownership in insurance firms. The finance minister also introduced a plan to consolidate India’s securities market regulations into a single code, updating the legal framework to attract greater investor participation.

Rupee Outlook

The Indian rupee jumped sharply in the closing moments of Friday’s trade after the central bank aggressively sold dollars, a step traders said was aimed at curbing speculative pressure on the currency.

The rupee ended the session up 0.7% at 89.6525, with most of the appreciation occurring in the final 10 minutes. Investors believed that the Reserve Bank of India intervened in the onshore market by selling dollars. Friday’s rally followed a strong intervention earlier in the week, when similar action on Wednesday pushed the rupee up by as much as 1% intraday.

FII outflows

As per NSDL data the total FPI selling through stock exchanges for December up to 20th stood at ₹21,104 crores. This takes the total FII sell figure for the year 2025, up to 20th December, to a massive ₹2,30,964 crores. It is important to note that during this period FIIs bought/ invested in equity for ₹73,106 crores through the primary market.

"As the year 2025 draws to a close, there are signs of a reversal of FII outflows witnessed this year and indications of capital inflows in 2026. The sustained FII selling, along with the high trade deficit, contributed significantly to the depreciation of the rupee in 2025. Rupee turned out to be the worst performing currency in Asia with an annual depreciation of above 5%. However, the last two days witnessed reversal of the currency depreciation. Rupee bounced back from the low of 91.14 to the dollar on 16th December to 89.29 on 19th December. This strengthening of the currency also helped to stem the tide of FII selling, too. During the last three trading days FIIs were buyers in the cash market with a total buy figure of ₹3596 crores.

With India’s GDP growth improving steadily and corporate earnings growth indicating and uptrend in the coming quarters, FIIs are likely to turn net buyers in 2026," said V K Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.

Gold prices

Gold and silver traded close to record levels as weaker-than-anticipated US inflation reinforced expectations of further interest-rate cuts, on Friday.

Spot gold was hovering around $4,330 an ounce by mid-morning Friday in New York and was set to post a second straight weekly gain. Core US consumer prices increased at the slowest rate since early 2021, data released on Thursday showed, strengthening the outlook for lower borrowing costs and lending support to non-yielding precious metals.

Technical Outlook

Nifty 50

On the Nifty 50 outlook, Ajit Mishra of Religare Broking believes that the index has reclaimed its short-term moving average, the 20-DEMA, around the 25,950 level.

“Sustained strength above this zone is essential for a move toward the 26,050–26,200 range, followed by a retest of record highs. On the downside, the previous swing low near 25,700 remains a key support; a breakdown below this level could broaden the consolidation, with the next major support placed around 25,450, coinciding with the 100-DEMA,” Mishra said.

Bank Nifty

On the Bank Nifty outlook, Mishra said that the index is hovering around its 20-DEMA amid mixed trends within private banking majors. “The broader structure remains constructive as long as it holds above the 58,400 support zone. A decisive close above 59,500 is required to trigger a fresh up-move toward the trendline resistance near 60,600; otherwise, consolidation may persist,” he added.

Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions.