Year-end setup: Nifty is nearly flat in December (-0.11% MTD as on 22 Dec) but still strong at +10.69% YTD, keeping sentiment constructive.
Seasonality edge: Historically, the Santa window has been favourable for India—Nifty positive 22 out of 25 times since 2000.
2025 key risk: Tariff and trade headlines (including India-linked risks up to 50% in select categories) can quickly disrupt global cues.
Santa Rally drivers: Santa Rally tends to be driven by year-end rebalancing, positioning and thin holiday liquidity, which can amplify moves.
Supportive Cues, Headline Volatility: Global cues remain supportive on expectations of more Fed rate cuts in 2026, but geopolitics and trade/tariff headlines can quickly spark sudden volatility.
What will drive moves: With thin holiday liquidity, the rally—if it plays out—will likely be led by FII flows, rupee movement and positioning.
Bottom line: Santa Rally is more likely than not, but it may be tactical, not euphoric, and highly headline-sensitive.
For more details read through our comprehensive report.