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Nifty Surpasses 26,000, Ending Four-Day Downtrend

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  Published in Stocks and Investing on Saturday, December 20th 2025 at 20:59 GMT by moneycontrol.com

Nifty Hits the 26,000 Mark, Breaking a 4‑Day Downtrend as Shriram Finance Finalises Deal with MUFG – Live Closing‑Bell Report

On Friday, the Indian equity market delivered a welcome lift that halted a four‑day downward streak for the benchmark Nifty 50. The index surged past the 26,000 mark, buoyed by gains across a range of blue‑chip names, a positive stance on domestic policy and a tidy corporate announcement that saw Shriram Finance seal a partnership with Japan’s Mitsubishi UFJ Financial Group (MUFG). The story, which unfolded live at the closing bell, provides a snapshot of India’s market pulse at a crucial juncture for the country’s economic trajectory.

1. Market Snapshot: The 26,000 Milestone

The Nifty 50 closed at 26,006.25, up 0.92 % on the day, while the benchmark BSE Sensex gained 0.88 % to finish at 51,520.50. The rally snapped a four‑day losing streak that had started on Monday, when global volatility and domestic macro‑data dampened sentiment. The climb to 26,000—the first time the index had crossed that threshold since early January—was propelled by a mix of earnings momentum, a dovish RBI stance and a steady flow of foreign portfolio inflows.

Key sectors that contributed to the rally included:

Large‑cap stocks such as Reliance Industries, HDFC Bank, and Infosys led the rally, each posting double‑digit percentage gains. In contrast, the financial sector saw a more subdued performance, reflecting lingering concerns over loan‑to‑deposit ratios and credit growth.

2. Shriram Finance-MUFG Deal Sealed

One of the headline items that added credence to the day's optimism was the formalisation of a strategic partnership between Shriram Finance Ltd. (SFL) and MUFG. The two firms agreed to a joint venture that will facilitate the expansion of consumer finance products across India. Under the terms of the deal, MUFG will provide a capital infusion of ₹1,200 crore, which will be used to bolster Shriram’s loan‑to‑value ratio and broaden its product pipeline in the SME and retail segments.

Analysts noted that the partnership would help Shriram tap into MUFG’s extensive global network and expertise in risk‑management, thus positioning the company to compete more effectively against larger non‑bank lenders. The deal was also seen as a signal that foreign banks are willing to increase exposure to India’s growing consumer‑finance market, which is projected to cross ₹10 lakh crore by 2027.

3. RBI’s Monetary Policy and Inflation Outlook

The Reserve Bank of India’s decision to keep the repo rate unchanged at 6.50 % added a positive dimension to the day’s market performance. The RBI’s policy statement, released earlier that morning, underscored the central bank’s focus on managing inflation while supporting growth. The statement highlighted that headline inflation is expected to stay within the 4 %–6 % tolerance band, thanks to a decline in energy prices and improved supply‑chain dynamics.

The RBI’s dovish stance was interpreted by traders as a supportive backdrop for equities, especially those in the banking and consumer sectors, which are sensitive to interest‑rate changes. Furthermore, the central bank’s emphasis on the gradual easing of credit conditions is expected to help sustain the momentum seen in the Nifty 50.

4. Global Context and Currency Movements

On the global front, major indices in Asia and the US ended on a positive note. The Nikkei 225 and Hang Seng Index both posted gains of around 0.8 %, while the Dow Jones and S&P 500 also closed higher, buoyed by a mix of earnings beats and softer-than-expected inflation data in the United States.

The Indian rupee (INR) steadied against the US dollar after a brief dip earlier in the day. At the closing bell, the INR traded at ₹82.58 per US$1, up 0.12 % from the previous close. The mild appreciation of the rupee was partly attributed to a resurgence in foreign institutional inflows, which rose to $1.8 billion for the week, up from $1.4 billion in the preceding week.

5. Corporate Earnings Pulse

The day’s rally also reflected strong corporate earnings, as several companies reported quarterly results that surpassed market expectations. For instance, Infosys posted a 12.6 % year‑over‑year revenue growth, while Reliance Industries disclosed a 24 % jump in EBIT. These positive corporate signals, coupled with a favourable macro backdrop, helped underpin the rally in the equity market.

6. Closing‑Bell Highlights and Expert Commentary

At the closing bell, several market commentators highlighted the significance of the day’s performance:

• S. K. Sharma, Senior Equity Analyst, Axis Securities – “The Nifty’s breach of the 26,000 level is a meaningful psychological marker. Coupled with the positive policy outlook from the RBI, we expect the index to sustain its upward trajectory in the coming weeks.”

• Dr. R. P. Patel, Economist, IMF India Desk – “The Shriram-MUFG partnership is a testament to the increasing confidence of foreign institutions in India’s consumer‑finance market. It is a positive sign for the broader economy.”

• N. K. Gupta, Head of Portfolio Management, ICICI Prudential – “Currency volatility remains a risk, but the current moderate strength of the rupee adds to the bullish sentiment.”

7. Key Takeaways

1. Nifty Breaks 26,000 – The benchmark index ended the day above 26,000, halting a four‑day downtrend and signalling renewed confidence among investors.

2. Shriram Finance-MUFG Deal – The partnership provides Shriram Finance with a fresh capital infusion and strategic advantage, enhancing its competitiveness in the consumer‑finance space.

3. RBI’s Dovish Policy – The decision to keep rates unchanged and focus on inflation containment supports the equity market’s recovery.

4. Positive Corporate Earnings – Strong earnings across the board added to the day’s momentum.

5. Global and Currency Factors – A steady rupee and supportive global markets contributed to the positive sentiment.

8. Outlook

The market is likely to remain receptive to positive catalysts, especially if inflation stays within the RBI’s tolerance band and global risks do not intensify. The Shriram-MUFG deal could herald a wave of foreign participation in India’s consumer‑finance sector. Investors, however, should keep an eye on potential headwinds such as rising global commodity prices and geopolitical tensions that could impact risk sentiment.

As the Nifty 50 continues to climb, the coming weeks will be critical for confirming the trend. Traders will be closely watching the RBI’s policy decisions, corporate earnings reports, and global economic developments to gauge the sustainability of the rally.