Markets Brace for Cautious 2026 Start Amid Global Cues, FII Selling & US Data

• Indian equities saw a narrow range, with broader markets outperforming Nifty50; Defence, Metal, Media sectors gained, while PSU Bank, IT, Pharma declined.
• FIIs continued selling Indian equities worth Rs 4,290.96 crore, dampening "Santa Claus" rally hopes and keeping volumes subdued.
• US economy grew 4.3% in Q3, but declining consumer confidence and other indicators raised skepticism despite record highs in S&P 500 and Dow Jones.
• RBI interventions stabilized the rupee, yet persistent FII outflows and US-India trade talks uncertainty will shape 2026 market direction.
• Nifty is overbought short-term, with Banking sector showing indecision; FIIs remain net short, preventing sharp falls but also sustained rallies.

Why It Matters: Cautious 2026 outlook for Indian markets due to FII selling, global cues, and Nifty's overbought status.