Market Indices and Overall Trend

The BSE Sensex opened flat with a marginal gain of 12.37 points but soon reversed course to close lower by 308.91 points, settling at 84,841.73, representing a decline of 0.35%. Similarly, the Nifty index mirrored this trend, with the Sensex trading at 84,839.06 by mid-session, down 299.21 points or 0.35%. Despite the fall, the Sensex remains approximately 1.55% below its 52-week high of 86,159.02, indicating that the broader market is still holding near recent peaks.

Technical indicators show the Sensex trading above its 50-day moving average (DMA), with the 50 DMA positioned above the 200 DMA, a configuration often interpreted as a medium-term bullish signal. However, the current session’s weakness suggests that investors are digesting recent gains and possibly awaiting fresh triggers for direction.

Sectoral Performance: IT Sector Stands Out

Out of 38 sectors tracked, only five sectors recorded gains while 33 sectors declined, underscoring the breadth of the market’s weakness. The NIFTY IT sector emerged as the top gainer, posting a 0.76% rise, buoyed by select software and technology stocks. In contrast, the NIFTY PSU Bank sector was the most affected, falling by 3.20%, reflecting pressure on public sector banks amid concerns over asset quality and credit growth.

Other sectors such as financial services, consumer discretionary, and industrials also faced selling pressure, contributing to the overall negative market tone.

Market Capitalisation Segments: Small and Mid Caps Under Pressure

The broader market segments showed a consistent pattern of declines. The BSE100 large-cap index fell by 0.55%, while the mid-cap and small-cap indices recorded sharper declines of 0.95% and 0.63%, respectively. This suggests that investors favoured large-cap stocks relative to their smaller counterparts, possibly reflecting risk aversion amid uncertain macroeconomic conditions.

The advance-decline ratio across the BSE500 was notably weak, with only 126 advances against 372 declines, a ratio of 0.34x, indicating broad-based selling pressure across the market.

Top Gainers and Losers Across Market Caps

Among the BSE500 stocks, Bombay Burmah led the gainers with a rise of 5.79%, followed by Sonata Software at 5.17% and Neuland Laboratories at 5.02%. These stocks benefited from sector-specific developments and positive investor interest.

On the downside, Indian Bank was the top loser, falling 6.25%, followed by Wockhardt at 5.50% and KNR Construction at 5.26%. The losses in Indian Bank and KNR Construction highlight the challenges faced by the banking and infrastructure sectors amid tightening liquidity and project delays.

Focusing on market capitalisation segments, Wipro was the top large-cap gainer, rising 1.88%, supported by steady demand for IT services. Biocon led the mid-cap gainers with a 2.75% increase, reflecting optimism in the pharmaceutical space. The small-cap segment saw OnMobile Global surge by 10.77%, a standout performance amid a generally weak market.

Conversely, Punjab National Bank was the largest large-cap decliner, down 4.70%, while Indian Bank also featured as the top mid-cap loser with a 6.25% fall. Hampton Sky was the most affected small-cap stock, declining 7.84%, indicating selective selling pressure in smaller stocks.

Foreign Institutional Investors and Domestic Institutional Investors Activity

While detailed data on Foreign Institutional Investors (FII) and Domestic Institutional Investors (DII) activity for the day is not available, the broad market weakness and sectoral divergences suggest cautious positioning by both groups. Typically, such market conditions reflect profit-booking by FIIs and selective buying by DIIs in defensive or growth-oriented sectors such as IT.

Global Cues and Their Impact

Global markets showed mixed signals on 3 December 2025, with major indices in the US and Europe fluctuating amid ongoing concerns about inflation and central bank policies. Asian markets were largely subdued, influenced by geopolitical tensions and economic data releases. These global factors contributed to the cautious mood in Indian markets, as investors weighed domestic fundamentals against external uncertainties.

Outlook and Investor Considerations

The current market session highlights a phase of consolidation after recent gains, with investors showing preference for defensive sectors such as IT while reducing exposure to riskier segments like PSU banks and small caps. The narrow advance-decline ratio and sectoral divergence suggest that selective stock picking remains crucial in the prevailing environment.

Investors may wish to monitor key technical levels, including the Sensex’s 50-day and 200-day moving averages, for indications of sustained trend direction. Additionally, global developments and domestic economic data releases in the coming days will likely influence market momentum.

Stocks such as Wipro and Biocon, which demonstrated resilience today, could attract attention for their relative stability and sectoral tailwinds. Conversely, names like Indian Bank and Punjab National Bank may continue to face headwinds until clarity emerges on credit growth and asset quality trends.

Summary

In summary, the Indian equity market on 3 December 2025 experienced a broad-based decline with the Sensex and Nifty retreating by approximately 0.35%. The IT sector provided a rare bright spot amid widespread selling, while PSU banks and mid-to-small caps bore the brunt of the weakness. Market breadth was weak, and the advance-decline ratio pointed to cautious investor sentiment. Global uncertainties and mixed domestic cues contributed to the subdued trading session, underscoring the need for investors to remain vigilant and selective in their portfolio strategies.

Get 1 year of Weekly Picks FREE when you subscribe to MojoOne. Offer ends soon. Start Saving Now →