Market Overview and Sectoral Performance
The market breadth on the day was decidedly negative, with only five sectors advancing against 33 sectors in retreat, resulting in an advancing-to-declining ratio of 0.15. The IT sector stood out as the top-performing segment, with the BSE IT index posting a gain of 0.72% and the NIFTY IT index rising by 0.54%. The Technology sector (TECK) also recorded a positive return of 0.42%, underscoring the resilience of technology-related stocks amid broader market weakness.
Conversely, the Public Sector Undertaking (PSU) banking and related sectors faced significant pressure. The NIFTY PSU Bank index declined by 2.37%, the BSE PSU index fell by 1.48%, and the NIFTY CPSE (Central Public Sector Enterprises) index dropped by 1.32%. These losses were driven by weak performances in key PSU banking stocks, notably Indian Bank, which declined by 5.51%, exerting downward pressure on the sector indices.
IT Sector: Key Drivers and Stock Highlights
The IT sector’s outperformance was led by Sonata Software, which recorded a substantial gain of 4.93% on the BSE. This stock’s strong showing contributed significantly to the BSE IT index’s positive return. Wipro also supported the sector’s momentum, with a 2.16% rise on the NIFTY IT index. Tata Communications, a major constituent of the TECK sector, added to the positive sentiment with a 2.16% gain.
The NIFTY IT sector exhibited the best advanced-to-declined ratio of 4.0, indicating that four stocks advanced for every one that declined. This breadth suggests a broad-based strength within the sector rather than isolated gains. The sector’s resilience can be attributed to ongoing demand for digital transformation services, steady deal wins, and favourable global IT spending trends, which continue to underpin investor confidence.
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PSU Banking and CPSE Sectors Under Pressure
The PSU banking sector faced the steepest declines, with Indian Bank’s 5.51% fall being a major drag on the NIFTY PSU Bank and BSE PSU indices. The NIFTY PSU Bank sector recorded an advanced-to-declined ratio of zero, indicating no stocks advanced on the day, which highlights the sector’s widespread weakness. Similarly, the NIFTY CPSE sector was weighed down by SJVN, which declined by 2.16%.
These declines reflect ongoing concerns about asset quality, credit growth, and profitability challenges in the PSU banking space. Additionally, macroeconomic factors such as interest rate pressures and government policy developments continue to influence investor sentiment negatively in these sectors.
Sector Outlook and Market Implications
The IT sector’s relative strength amid a broadly negative market environment suggests that investors are favouring sectors with stable earnings visibility and growth prospects. The ongoing global demand for IT services, cloud computing, and digital solutions is expected to sustain interest in IT stocks like Sonata Software and Wipro.
In contrast, the PSU banking and CPSE sectors may continue to face headwinds until there is clearer evidence of improvement in credit quality and earnings. Investors may remain cautious given the sector’s sensitivity to macroeconomic shifts and regulatory developments.
Overall, the market’s current dynamics underscore the importance of sectoral diversification and selective stock picking. The IT sector’s outperformance offers a defensive play in uncertain times, while the PSU banking sector’s challenges highlight the need for careful risk assessment.
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Investor Considerations
Investors analysing the current market environment may consider the IT sector’s demonstrated resilience as a potential avenue for portfolio stability. Stocks such as Sonata Software and Wipro have shown capacity to navigate market volatility, supported by strong order books and favourable industry trends.
Conversely, exposure to PSU banking and CPSE stocks requires a cautious approach given the sector’s ongoing challenges. Monitoring developments related to asset quality, government policy, and macroeconomic indicators will be critical for assessing risk in these areas.
As the market continues to digest global economic signals and domestic policy shifts, sector-specific catalysts will play a pivotal role in shaping performance. The IT sector’s growth drivers remain intact, while PSU banking sectors await clearer signs of recovery.
Conclusion
The Indian stock market’s broad decline on 3 December 2025 was marked by a clear divergence between sectors. The IT sector, led by Sonata Software and Wipro, bucked the trend with gains supported by strong fundamentals and positive market sentiment. In contrast, PSU banking and CPSE sectors faced significant headwinds, reflecting ongoing structural and macroeconomic challenges.
For investors, the current landscape emphasises the value of sectoral analysis and selective stock exposure. The IT sector’s performance highlights its role as a defensive growth segment, while caution remains warranted in PSU banking and related sectors until clearer recovery signals emerge.
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