Market Overview and Index Movements

The Sensex opened the day marginally higher by 12.37 points but soon reversed course, registering a fall of 270.82 points during intraday trade before settling at 84,879.82. This level places the index approximately 1.51% below its 52-week high of 86,159.02. Notably, the Sensex continues to trade above its 50-day moving average (DMA), which itself remains above the 200 DMA, signalling that the medium-term technical trend remains intact despite the recent pullback.

The Nifty mirrored this pattern, with the broader market sentiment leaning towards caution as investors digested mixed global cues and domestic factors. The decline in benchmark indices was accompanied by a pronounced market breadth imbalance, with the advance-decline ratio across the BSE500 standing at 123 advances against 377 declines, a ratio of 0.33x, indicating a predominance of selling pressure.

Sectoral Performance: IT Sector Holds Ground

Out of 38 sectors tracked, only four sectors recorded gains, while 34 sectors declined. The BSE IT sector led the gainers with a modest rise of 0.73%, buoyed by select software stocks. This resilience contrasts sharply with the banking sector, which faced significant headwinds. The Nifty PSU Bank index declined by 3.00%, marking it as the top losing sector for the day.

Large-cap banking stocks such as Punjab National Bank and Indian Bank were among the most notable laggards. Punjab National Bank closed down by 4.46%, while Indian Bank registered a steeper fall of 6.38%. These declines contributed materially to the overall sector weakness and weighed on the broader indices.

Top Gainers and Losers Across Market Caps

Among large caps, Wipro stood out as the top gainer, advancing by 2.06%, supported by positive sentiment around IT services. In the mid-cap space, Hexaware Technologies recorded a gain of 2.27%, reflecting selective buying interest in technology-related names. Small caps saw a more pronounced divergence, with Hikal surging by 11.66%, showcasing strong demand in niche chemical manufacturing, while Hampton Sky declined by 7.84%, marking the steepest fall among small caps.

Other notable gainers on the BSE500 index included Sonata Software, which rose by 5.20%, ZF Commercial with a 4.98% gain, and Neuland Laboratories advancing 4.62%. Conversely, Wockhardt slipped by 4.75%, adding to the pressure on healthcare stocks.

Market Capitalisation Segments and Breadth

The BSE100 large-cap index declined by 0.49%, while the mid-cap and small-cap indices experienced sharper falls of 0.93% and 0.55% respectively. This pattern suggests that mid-cap stocks bore the brunt of the selling pressure, with small caps showing a mixed response. The overall market breadth, as indicated by the advance-decline ratio, underscores the cautious stance adopted by investors amid uncertain macroeconomic signals.

Foreign institutional investors (FIIs) and domestic institutional investors (DIIs) activity data for the day was not explicitly detailed, but the broad market weakness and sectoral divergences imply a cautious approach by both categories of investors. Global markets were mixed, with some softness in US and European indices, which likely influenced domestic sentiment.

Global Cues and Their Impact

Internationally, markets have been digesting a combination of factors including ongoing geopolitical tensions, central bank policy outlooks, and economic data releases. The cautious tone in global equities has filtered into Indian markets, contributing to the subdued performance. The IT sector’s relative strength may be attributed to steady demand for technology services globally, which continues to support companies like Wipro and Hexaware Technologies.

Investor Takeaways and Outlook

Today’s market action highlights the prevailing cautious mood among investors, with defensive sectors such as IT showing relative strength while cyclical and banking sectors face pressure. The Sensex’s position above key moving averages suggests that the broader uptrend remains intact, but the current pullback signals the need for selective stock picking and risk management.

Investors may wish to monitor sectoral rotations closely, particularly the performance of IT stocks like Wipro and Hexaware Technologies, which have demonstrated resilience. Conversely, the banking sector’s weakness, exemplified by declines in Punjab National Bank and Indian Bank, warrants careful scrutiny given its significant weight in the indices.

Market breadth and mid-cap weakness indicate that broader market participation remains subdued, and global uncertainties continue to influence domestic trends. As such, a balanced approach focusing on fundamentally sound companies with consistent growth profiles may be prudent in the near term.

Conclusion

The Indian equity markets on 3 December 2025 experienced a modest correction, with the Sensex retreating by 0.30% amid broad-based declines. Sectoral divergences were pronounced, with the IT sector providing a rare bright spot. Market breadth and capitalisation segment performance suggest cautious investor positioning amid mixed global cues. Monitoring key sectors and individual stock fundamentals will be essential as markets navigate ongoing volatility.

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