Sensex and Nifty Performance Overview

The benchmark Sensex opened flat, initially down by 36.70 points, before extending losses to close 0.34% lower. The index is currently 1.66% below its 52-week high of 86,159.02, recorded earlier this year. Technical charts show the Sensex trading above its 50-day moving average (DMA), which itself remains above the 200 DMA, indicating a sustained medium-term uptrend despite the recent pullback.

The Nifty followed a similar pattern, with large caps trading largely flat, reflecting cautious investor sentiment amid mixed global cues. The BSE100 index declined by 0.31%, midcaps fell 0.57%, and small caps were down 0.71%, highlighting a broad-based weakness across market capitalisation segments.

Sectoral Trends: Metals Lead, Utilities Lag

Out of 38 sectors tracked on the BSE, only six advanced while 32 declined, underscoring the widespread selling pressure. The Nifty Metal sector was the top gainer, rising 0.30%, buoyed by strong performances from key constituents such as Tata Steel, which gained 2.07%. This sector strength was supported by robust global commodity prices and positive demand outlooks.

Conversely, the S&P BSE Utilities sector was the worst performer, falling 1.00%, weighed down by concerns over regulatory pressures and subdued earnings prospects. Other defensive sectors also struggled, reflecting a risk-off mood among investors.

Top Gainers and Losers Across Market Caps

Among large caps, Tata Steel led the gainers with a 2.07% rise, benefiting from renewed investor interest in cyclical stocks. In the midcap space, Deepak Nitrite advanced 1.69%, supported by steady operational performance and positive sectoral tailwinds. The small cap segment saw a standout performance from Birla Nuvo Ltd, which surged 12.55%, marking one of the day’s most significant rallies.

On the downside, Dixon Technologies was the largest large cap loser, dropping 2.78%, pressured by profit booking after recent gains. Rail Vikas, a midcap stock, declined 4.37%, while Timex Group was the worst performer among small caps, plunging 8.60% amid weak volume and negative sentiment.

Market Breadth and Broader Indices

The advance-decline ratio on the BSE500 was notably weak, with only 137 advances against 361 declines, resulting in a ratio of 0.38x. This indicates a broad-based sell-off, with more than two-thirds of stocks ending lower. The BSE500 top gainers included HEG (+5.03%), HFCL (+4.24%), and Hindustan Copper (+3.94%), all benefiting from sector-specific catalysts.

On the flip side, the top losers in the BSE500 were IRFC (-4.38%), Rail Vikas (-4.37%), and Asahi India Glass (-3.98%), reflecting sectoral headwinds and profit-taking pressures.

Foreign Institutional and Domestic Institutional Activity

Foreign Institutional Investors (FIIs) exhibited cautious behaviour, with net outflows observed in the equity segment, reflecting global uncertainties and profit booking ahead of year-end. Domestic Institutional Investors (DIIs), however, remained marginal net buyers, providing some support to the market amid the selling pressure from FIIs.

This mixed institutional activity contributed to the subdued market performance, as investors balanced concerns over global macroeconomic factors with domestic growth prospects.

Global Cues and Their Impact

Global markets closed mixed on 29 Dec 2025, with US indices retreating slightly amid concerns over inflation and interest rate outlooks, while European markets showed modest gains. Asian markets were largely subdued, reflecting cautious sentiment ahead of the new year. These global cues influenced Indian markets, contributing to the cautious trading environment and subdued investor appetite for risk.

Commodity prices, particularly metals, remained firm, supporting the outperformance of the metal sector domestically. However, concerns over geopolitical tensions and currency volatility kept broader market sentiment in check.

Technical Outlook and Moving Averages

From a technical perspective, the Sensex’s position above its 50-day moving average, which itself is above the 200-day moving average, suggests that the medium-term uptrend remains intact despite the recent pullback. However, the weakening market breadth and sectoral divergences indicate that investors should exercise caution and monitor key support levels closely.

Should the index breach the 50 DMA decisively, it could signal a deeper correction phase. Conversely, a rebound from current levels may attract fresh buying interest, especially in cyclical and metal stocks.

Investor Takeaway

As the year draws to a close, Indian equity markets are exhibiting signs of consolidation after a strong rally earlier in 2025. The modest decline in the Sensex, coupled with weak market breadth and sectoral divergences, suggests that investors are adopting a cautious stance amid mixed global and domestic signals.

Investors may consider focusing on fundamentally strong sectors such as metals, which continue to benefit from favourable global commodity dynamics, while remaining vigilant on defensive sectors like utilities that are facing headwinds. Monitoring institutional flows and technical support levels will be crucial in navigating the near-term market environment.

Overall, the market appears poised for selective opportunities rather than broad-based rallies, underscoring the importance of stock-specific research and disciplined portfolio management.

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