Sensex down 367 pts, Nifty below 26,050; will stock market continue to fall next week?

Domestic equity benchmarks Sensex and Nifty closed lower on Friday as muted year-end participation kept the market range-bound. Weakness in IT and auto stocks added to the pressure, weighing on overall sentiment.

At close, the Sensex declined 367.25 points, or 0.43% to settle at 85,041.45, while the Nifty fell 99.80 points or 0.38% to close at 26,042.30.

Bajaj Finance emerged as top loser on the Sensex, dropping 1.48% to Rs 999.80. Asian Paints followed with a 1.41% fall, while HCL Technologies, TCS, Eternal and Tech Mahindra declined 1.36%, 1.22%, 1.12% and 1.05%, respectively. 

Five stocks, namely HDFC Bank, ICICI Bank, Bharti Airtel, Tata Consultancy Services (TCS) and Bajaj Finance, contributed heavily to the Sensex’s fall.      

Among sectoral indices, the BSE IT index declined 0.89% to close at 37,420.39, while the BSE Auto fell 0.54% to settle at 61,610.45.

Overall, of the 4,379 actively traded BSE stocks, 1,753 closed higher, 2,441 declined, and 185 remained unchanged. During the session, 112 stocks touched their 52-week highs, while 120 fell to 52-week lows. Meanwhile, 204 scrips hit their upper circuits, and 154 were locked in lower circuits.

Vinod Nair, Head of Research at Geojit Investments Limited, said domestic equities closed lower on the day, weighed down by thin year-end trading volumes and a cautious investor stance ahead of the upcoming earnings season, which led to broad-based profit-taking across sectors.

“The optimism around the Santa Claus rally has diminished amid the absence of fresh catalysts, such as progress on a possible US‑India trade agreement, while continued FII outflows weighed on the Indian rupee. Large‑cap stocks underperformed mid- and small-cap counterparts, though selective strength persisted in metals and consumer durable stocks, while IT, autos, and banks witnessed sustained selling pressure," Nair said.

Rupak De, Senior Technical Analyst at LKP Securities, said the 50-pack index continues to remain weak as the index has slipped below the 21 EMA on the hourly chart, indicating a rise in bearish bets after two days of a rangebound phase in recent sessions.

“The RSI is in a bearish crossover and trending lower, reflecting weakening momentum. During the session, the Nifty found support near the 26,000 level, where the 21 EMA is currently placed. In the near term, the trend may improve and retrace towards 26,200 and higher, provided 26,000 holds decisively. However, a sustained move below 26,000 could trigger further weakness in the market," De said.