Trade Setup for December 17: Bears in control as Nifty risks deeper correction going ahead

The Indian equity market remained under pressure amid weak global cues, with the Nifty once again facing resistance near the 26,000 mark. The index extended its decline for a second straight session, shedding 167 points to close at 25,860.

The Nifty opened about 75-76 points lower and stayed under persistent selling pressure through most of the session, eventually ending near the day's low despite a marginal recovery toward the close.

The selloff was broad based. As many as 38 of the 50 Nifty stocks closed lower, with broader markets witnessing sharper pain. The Nifty Midcap 100 fell 0.93%, while the Nifty Smallcap 100 declined 0.9%.

Bharti Airtel, Titan and Tata Consumer emerged as the top Nifty gainers, while Axis Bank, Eternal and JSW Steel ended as the biggest losers.

Sectorally, barring Consumer Durables and Media, all indices closed in the red, led by steep declines in Realty, Private Banks, IT and Metals.

Adding to the weak sentiment, the rupee depreciated for the fifth consecutive session, falling 30 paise to close at a fresh record low of ₹91.08 per dollar. The sustained weakness in the currency is largely attributed to continued foreign institutional investor outflows and ongoing global risk aversion.

On the macro front, investors are tracking key US economic data due later today, including Nonfarm Payrolls for November 2025, the unemployment rate and monthly retail sales.

From a market outlook perspective, Siddhartha Khemka of Motilal Oswal expects Indian equities to trade sideways in the absence of meaningful near term triggers.

Nagaraj Shetti of HDFC Securities sees the Nifty slipping toward its next support band of 25,800-25,700 in the short term, adding that any bounce is likely to face a strong hurdle near 26,000.

Nilesh Jain of Centrum Broking said the overall trend remains sideways, with immediate support placed near the 50 day moving average around 25,790. A decisive break below this level could open the door for further downside toward 25,700.

On the upside, a sustained move above the 21 day moving average at 26,030 would be essential to trigger a pullback, potentially pushing the index toward 26,250, Jain added.

LKP Securities' Rupak De said that the session clearly favoured bears, as the Nifty stayed below the key 200 period simple moving average on the hourly chart throughout the day. The breach of support near 25,870 further intensified bearish sentiment, with the index likely to drift toward 25,700 or lower in the near term.

According to Nandish Shah of HDFC Securities, the index is now edging closer to its 50 day exponential moving average support around 25,760. A decisive break below this level could deepen the ongoing correction, while 26,000 remains the immediate resistance on the upside.