Sensex slips 116 pts, Nifty below 26,150 ahead of Christmas break; what’s next?

Domestic equity benchmarks Sensex and Nifty ended Wednesday’s session in red, as sustained selling by foreign portfolio investors and profit-taking weighed on sentiment ahead of the Christmas holiday, overshadowing otherwise positive global cues.

At close, the Sensex settled 116.14 points, or 0.14% lower at 85,524.84, while the Nifty declined 35.05 points or 0.13% to close at 26,142.10.

Tata Motors PV emerged as top loser on the Sensex, dropping 1.05% to Rs 359.30. Sun Pharma followed with a 1.01% fall, while Asian Paints, Reliance Industries, Hindustan Unilever and Tata Steel declined 0.83%, 0.82%, 0.80% and 0.53%, respectively. 

Five stocks, namely Reliance Industries (RIL), ICICI Bank, Sun Pharma, IndiGo, and Hindustan Unilever, contributed heavily to the Sensex’s decline.     

Among sectoral indices, the BSE Energy index declined 0.58% to close at 12,015.37, while the BSE IT fell 0.44% to settle at 37,756.95.

Overall, of the 4,332 actively traded BSE stocks, 1,836 closed higher, 2,343 declined, and 153 remained unchanged. During the session, 115 stocks touched their 52-week highs, while 102 fell to 52-week lows. Meanwhile, 197 scrips hit their upper circuits, and 129 were locked in lower circuits.

Vinod Nair, Head of Research at Geojit Investments Limited, said domestic equities largely traded in a narrow range during the holiday-shortened week, as muted participation kept volumes thin toward the year-end. He added that the lacklustre momentum was in line with trends seen across major Asian markets.

Nair said the RBI’s recently announced liquidity initiatives, including OMOs and a USD/INR buy–sell swap, are expected to improve systemic liquidity and help stabilise currency volatility.

“On the global front, stronger-than-expected US GDP data points to economic resilience, although rising unemployment has tempered optimism. Gold extended its rally on a softer dollar and elevated geopolitical risks, supported by increasing expectations of continued Fed policy easing. Meanwhile, Brent crude hovered near multi-year lows, reinforcing a benign inflation outlook. Looking ahead, market activity is likely to remain muted, though investors will be closely tracking developments on the trade front," Nair added.