Nifty, Sensex Prediction For 2026: Is The Current Oversold Setup A Bullish Signal? Ajay Bagga Answers

The last three days of an eventful year are here. Volumes are down as most of the working humanity is on year-end vacations. Santa is expected to give a miss this year to the stock markets, while precious metals and copper are doing the heavy lifting for all asset classes. 

Silver which briefly hit $80 in Asian trading this morning has now claimed the third spot, behind only Gold and Nvidia, across assets. Gold made yet another record high last week, but is slightly flat this morning.

US and Asian Market Performance

US markets were flat on Friday and this morning US stock futures are also flat. Asian markets are mixed ahead of the HK open, with Japanese markets showing some weakness while Australia is up.

For the holiday shortened last week, the S&P 500 gained 1.4%, notching its fourth weekly advance in five weeks. The Dow and Nasdaq were also up more than 1% in the previous week.

Geopolitical Highlights: Trump-Zelensky Meeting

The Trump-Zelensky meeting, with a Trump-Putin phone call before the meeting and a Trump-Zelensky-European leaders phone call post the meeting was the highlight of Sunday. Some progress was made, but the territorial issues remain the sticky point. Expect a Trump-Zelensky-European leaders meeting in Washington in January and a proposed trilateral between Trump-Putin-Zelensky eventually as a precursor to a peace agreement being signed

Outlook for the Final Trading Days of 2025

With not much economic news flow, low volumes, festive cheer and the record setting performance from precious metals and copper, this week should see a flattish winding down of 2025 trading and a muted start to 2026.

Indian Markets: Expiry Volatility and Future Catalysts

Indian markets will see the December index expiry for two key indices on Tuesday, so there could be some volatility, even though the India VIX has stayed at historically low levels, in single digits. The overbought markets have become neutral to oversold markets, a good set up for a positive move at some time. For now we expect low volumes and lack of any catalysts this week to lead to flat to negative markets.

Looking Ahead: Catalysts for January 2026

The triple positive catalysts of the Union Budget 2026, Q3 FY2026 corporate earnings recovery and progress on US-India trade deal will start helping Indian markets later in January 2026. For this week, low volumes, so profit booking and low propensity to take fresh positions at a universal vacation time will be the key markets for the stock markets.

Also Read: Ajay Bagga Sees Volatility Ahead as Global Cues, Fed Decision and Big Tech Earnings Steer Indian Markets