Indian equity markets ended marginally lower on Tuesday, extending losses for the fifth consecutive session amid thin year-end trading volumes and persistent foreign institutional investor outflows that continued to weigh on investor sentiment.

Market Performance

The benchmark indices closed with minimal losses after a day of range-bound trading:

The Sensex traded in a range of 336.05 points during the session, hitting a high of 84,806.99 and a low of 84,470.94. The Nifty opened at 25,940.90 against its previous close of 25,942.10. This follows Monday's session where the Sensex declined 345.91 points and the Nifty slipped 100.20 points.

Stock Movement and Sectoral Performance

Among the 30 Sensex constituents, the session saw mixed performance with notable movements:

Top Gainers:

Top Decliners:

The broader markets witnessed selling pressure in the previous session, with Nifty Midcap and Smallcap indices declining around 0.50% each. Railway stocks witnessed profit booking after recent sharp rallies, with IRFC and RVNL sliding close to 5.00% each.

Global Market Trends

Global markets presented a mixed picture that influenced domestic sentiment:

Brent crude, the global oil benchmark, climbed 0.47% to $62.23 per barrel, providing some support to energy-related stocks.

Institutional Activity

Foreign and domestic institutional investor activity continued to show divergence:

The persistent FII selling has been a key factor weighing on market sentiment, though DIIs have largely offset these outflows through consistent buying.

Technical Analysis and Market Outlook

The Nifty 50 continues to form a lower high-lower low structure on the daily chart, indicating short-term weakness. The 25,900-25,800 zone stands out as a critical support cluster, aligning with the 50-day EMA and recent monthly lows.

Market experts noted that the year-end trend, though weak, doesn't indicate a directional change in the market. A clear directional change is expected only early in the new year when large institutions return to active trading. The thin year-end liquidity and monthly F&O expiry have contributed to increased intraday volatility and cautious trading sentiment.

Indian equity markets closed on a weak note as investors stayed cautious ahead of the December series derivatives expiry, with selling pressure visible across sectors and the broader market mirroring benchmark losses. The decline extended recent market weakness amid risk-off sentiment and year-end caution in thin holiday trade.

Market Performance Overview

The benchmark indices posted modest declines during the session:

The Nifty settled below the psychologically important 26,000 mark, highlighting subdued market sentiment. Market breadth clearly favoured declines, with 2,831 stocks declining against 1,495 advances on the BSE, while 186 remained unchanged. The session saw 115 stocks hitting 52-week highs, but 195 touched 52-week lows, reflecting underlying weakness.

Sectoral Performance Analysis

Sectoral performance was largely negative across major indices:

Metal stocks emerged as the top gainers despite overall market weakness, receiving a sector-specific boost following the government's imposition of anti-dumping duties on select Chinese steel imports, enhancing pricing power and margin visibility for domestic producers.

Stock-Specific Movements

Top gainers were led by metal and select FMCG stocks:

On the losing side, technology and infrastructure stocks faced pressure:

Market Outlook and Technical Analysis

Volatility indicators showed increased uncertainty, with India VIX rising 6.23% to 9.71, suggesting heightened caution among market participants ahead of the monthly F&O expiry. Technical analysis indicates that after a muted open, the market slipped below the 26,000/85,000 mark, with post-breakdown selling pressure increasing.

Analysts expect the 26,000/85,000 level or the 20-day SMA to act as key resistance zones. The market appears short on catalysts for further upside, with investors largely in holiday mode, signalling a potential consolidation phase in the near term.

Currency Performance

The Indian rupee continued its downward spiral, marking its fifth consecutive session of losses, weakening marginally to 89.95 against the U.S. dollar. The persistent decline was intensified by typical month-end demand from importers and corporates scrambling for the greenback in thin liquidity conditions. The currency is expected to find support around 88.95 with recovery facing a hurdle at 90.30.

Market Outlook

In an environment of global trade anxiety and a weakening rupee, investors are likely to favour large-cap stocks for their relative safety and stronger earnings visibility. Markets are expected to remain in a consolidation phase in the absence of fresh triggers, with attention shifting toward upcoming earnings and clarity on trade developments.