Stock Market Outlook: Sensex, Nifty Today Expected to Trade in Narrow Range Ahead of US Inflation & Jobs Data

Indian equity markets are expected to trade in a narrow range on 16 December 2025, with the Sensex and Nifty likely to remain cautious amid global and domestic uncertainties. While selective buying in sectors like media, FMCG and IT may provide short-term support, persistent foreign fund outflows, a weak rupee and pending clarity on the India-U.S. trade deal are likely to keep the benchmarks range-bound.

Stock Market Outlook 16 December 2025: Sensex, Nifty Prediction Today

The Sensex slipped 54.30 points, or 0.06%, to close at 85,213.36, while the Nifty declined 19.65 points, or 0.08%, to 26,027.30. Market participants remained cautious ahead of critical U.S. economic data, including CPI inflation, non-farm payrolls, retail sales, unemployment rate, and manufacturing PMI, all of which are expected to provide cues on global liquidity conditions and interest-rate expectations for 2026.

"Indian equity markets ended marginally lower on Monday, recovering from early losses to close near the day's high amid a weak global risk environment," said Siddhartha Khemka, Head of Research, Wealth Management at Motilal Oswal Financial Services Ltd. "The Nifty settled at 26,027, down 19 points (-0.08%), snapping a two-session rally despite persistent foreign investor selling and ongoing uncertainty around a potential U.S. trade deal, which continued to cap risk appetite."

Stocks in Focus Today: PSU Banks, Media, IT & FMCG Shares To Watch on Tuesday

Sectoral trends were mixed, reflecting selective buying rather than broad-based participation. PSU banks, media, IT, FMCG, and consumer durables advanced 0.3-1%, while auto, pharma, and telecom stocks fell 0.5-1%. Among broader market indices, the midcap index ended flat, while small-cap stocks managed a minor gain of 0.2%.

Nifty Media emerged as the top performer, rising 1.8%, followed by Nifty FMCG, which gained 0.6% on defensive buying. On the downside, Nifty Auto slipped 1% while Nifty Pharma declined 0.4%.

Rupee Touched Fresh Record Low: How It Will Impact Indian Stock Market Today?

The Indian rupee touched a fresh record low of 90.6 against the U.S. dollar, marking the third consecutive session of depreciation. On the macro front, India's trade deficit narrowed in November, aided by exports hitting their highest level in nearly three and a half years.

Domestic liquidity remained robust, with mutual fund assets under management crossing the Rs 80 trillion mark in November. SIP assets rose to Rs 16.53 trillion, now accounting for over one-fifth of total AUM, underscoring resilient retail participation and confidence in disciplined long-term investing despite short-term volatility.

Nifty Prediction Today For 16 December 2025

According to Bajaj Broking Research, the Nifty formed a bullish candlestick pattern, signaling buying demand at lower levels amid stock-specific action. "Nifty, after the last 2-3 sessions of pullback, is currently placed around the falling trendline joining last two weeks' highs, which also coincides with the 61.8% retracement of the previous decline placed around 26,080 levels. A follow-through strength above this level will open further upside towards 26,200-26,300 levels in the coming sessions," the brokerage said.

The index rebounded from Friday's gap-up area of 25,900, with key support now seen at 25,700-25,800. In the short term, Nifty is expected to trade in a range of 25,700-26,300.

Bank Nifty Outlook

Bank Nifty also showed signs of consolidation with buying interest at lower levels around the 20-day EMA. "The index is currently testing the trendline resistance joining the last two highs placed around 59,500 levels. A follow-through above this will open further upside towards the all-time high of 60,100 in the coming sessions," Bajaj Broking noted.

The brokerage added that Bank Nifty is expected to extend its current consolidation in the 58,500-60,100 range. Key short-term support lies at 58,200-58,600, while a breakout above 60,100 could accelerate gains toward 60,500.

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