Economic Indicators to Steer Markets: Volatility Expected in the Coming Week

Indian stock markets are set to navigate a crucial week as key domestic and global economic developments take center stage. With European and US markets remaining closed on the first day of the New Year, analysts expect reduced participation from foreign investors. However, the expiry of December derivative contracts could trigger heightened volatility across domestic indices.

Several important economic indicators are scheduled for release this week in India, the United States, and China. On December 29, India will announce its Industrial Production (IIP) data for November, after recording a 0.4 percent year-on-year growth in October. The December derivatives series on the NSE will expire on December 30, followed by the release of fiscal deficit figures up to the end of November on December 31. Automobile sales data will be announced on New Year’s Day, while January 2 will see the release of the HSBC Manufacturing PMI for December along with India’s foreign exchange reserves data.

On the global front, China is set to release its manufacturing and non-manufacturing PMI data for December. In the US, key releases include the manufacturing index and advance trade estimates for October. The Federal Reserve will publish the minutes of its most recent policy meeting on December 31, while weekly unemployment claims data could further influence market sentiment.

Market experts note that as the calendar year draws to a close, trading activity by foreign portfolio investors may remain subdued. At the same time, the rollover of positions into the January 2026 F&O series is expected to play a significant role in driving short-term market movements, keeping volatility elevated.

Despite limited trading days last week, domestic markets managed to close in positive territory. The BSE Sensex gained 112 points to settle at 85,041, while the NSE Nifty added 76 points to end at 26,042. Analysts believe this indicates underlying resilience, even as markets remain sensitive to macroeconomic cues.

From a technical perspective, experts suggest that the Nifty may find support in the 25,800–25,920 range this week. A sustained rebound from these levels could push the index towards 26,450, with the possibility of testing the 27,000 mark in the near term. Similarly, the Sensex is expected to hold support around 84,200–84,600, and a breakout could lead to levels of 86,200 and potentially 87,000 in the coming weeks.