What to Expect from Stock Markets This Holiday-Shortened Week?

As the holiday season approaches, stock markets are expected to trade within a range, influenced by foreign investor activity and key economic data releases. Analysts predict subdued trading volumes due to Christmas and New Year holidays, with a focus on domestic infrastructure output and global market performance. The upcoming US GDP and PCE data will be crucial for understanding market direction. Despite recent declines, a rebound in investor interest offers a glimmer of hope for a positive trading bias this week. Discover what to expect in the stock market during this festive period.

By Narendra Chaudhary Dec 21, 2025, 16:17 IST

Market Outlook Amid Holiday Season

New Delhi: Analysts predict that stock markets are set to experience a range-bound trading pattern during this week, which is shortened due to the holiday season. Factors such as foreign investor activity, currency fluctuations, and global economic data releases are anticipated to influence market sentiments.

Many international markets are expected to see reduced trading volumes as the Christmas and New Year holidays approach, according to experts.

The domestic stock market will observe a closure on Thursday in observance of Christmas.

As the festive season begins, trading volumes are likely to be lower due to the holiday break. Investors will be keeping an eye on domestic infrastructure output data, along with updates regarding bank loan and deposit growth, as well as foreign exchange reserves. Additionally, currency movements and crude oil prices will play a significant role.

Ajit Mishra, Senior Vice President of Research at Religare Broking Ltd, noted that the performance of major global markets, especially the US, will be closely watched for directional guidance.

Ponmudi R, CEO of Enrich Money, emphasized that while strong domestic liquidity provides a buffer against significant downturns, the resurgence of foreign fund inflows could serve as a catalyst for the market's next upward movement, enhancing overall risk appetite.

However, the sustainability of any momentum observed later in the week will depend heavily on key global economic indicators, particularly the upcoming US GDP and core personal consumption expenditure (PCE) data, which are expected to shed light on the US economy's health amid changing inflation and growth dynamics.

Ponmudi R also mentioned that market sentiment has improved following lower-than-expected US inflation figures, which have rekindled hopes for further monetary easing by the US Federal Reserve—an environment historically favorable for emerging market equities, including those in India.

Last week, the BSE benchmark index fell by 338.3 points, or 0.39%, while the Nifty index decreased by 80.55 points, or 0.30%.

Despite prevailing selling pressure throughout most sessions, a rebound on the final trading day—driven by value buying and renewed interest from foreign portfolio investors—helped mitigate the losses.

On Friday, the 30-share BSE Sensex surged by 447.55 points, or 0.53%, closing at 84,929.36, while the 50-share NSE Nifty rose by 150.85 points, or 0.58%, to reach 25,966.40.

This week, markets are expected to trade within a range but with a positive inclination, bolstered by signs of increasing foreign institutional investor participation and a slight recovery in the Indian Rupee against the US Dollar. Many global markets will likely experience subdued activity due to the holiday season.

Key macroeconomic data releases this week will include GDP figures from the US and UK, as well as US consumer confidence data. Overall, the market is anticipated to remain stable, with investor attention gradually shifting towards the upcoming Q3 corporate earnings season.