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Below the Perspective on markets by Mr. Jaykrishna Gandhi, Head - Business Development, Institutional Equities, Emkay Global Financial Services

“U.S. equity markets continue to display year-end resilience, with the Santa Rally extending into the holiday trading window. Benchmark indices remain near record highs, supported by easing inflation expectations, optimism around a soft-landing narrative, and continued leadership from large-cap technology stocks.

Low holiday volumes are amplifying price moves, while steady retail participation and institutional positioning into year-end have helped maintain upward momentum. Although pockets of caution remain around valuations and 2026 growth assumptions, the near-term sentiment remains constructive, keeping the seasonal rally intact.

Indian equities are mirroring global optimism, albeit with a more measured and selective approach. After a strong year, markets are consolidating at higher levels as investors digest global cues, currency movements, and domestic earnings outlooks. FII flows remain volatile, largely tracking U.S. rate expectations and currency movements, while strong DII participation continues to act as a counterbalance, providing stability to the market.

The INR has remained relatively range-bound, offering comfort on the macro front despite global crosscurrents. Gold and silver prices have remained firm, benefiting from expectations of rate cuts and ongoing geopolitical uncertainty. In INR terms, precious metals continue to act as an effective portfolio hedge, aided by currency dynamics and sustained investment demand. Investors continue to use gold and silver as diversification tools amid equity market volatility.

Select financials are showing strength on stable asset quality and credit growth visibility. Discretionary consumption is witnessing early signs of improvement. After recent corrections, valuations in pockets of the mid- and small-cap space appear more reasonable, offering selective opportunities.

While the U.S. market benefits from seasonal Santa Rally tailwinds, Indian equities continue to reflect structural strength with tactical consolidation. A balanced approach — focusing on quality businesses, improving sectoral trends, and prudent allocation across equities and hedges like gold — remains key as investors position for the new year”.

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