Sensex and Nifty Performance Overview

The Sensex opened the day with a marginal gain of 12.37 points but gradually drifted into negative territory, closing with a loss of 85.58 points, or 0.10%. The index currently stands approximately 1.3% below its 52-week high of 86,159.02 points. Technical indicators show the Sensex trading above its 50-day moving average (DMA), which itself remains above the 200 DMA, signalling a generally positive medium-term trend despite the day's weakness.

The Nifty index mirrored this cautious tone, with a similar pattern of limited upside followed by a mild retreat. Market breadth was notably weak, with only 126 advances against 373 declines across the BSE500 universe, resulting in an advance-decline ratio of 0.34x. This breadth suggests that selling pressure dominated the session, particularly among mid and small caps.

Sectoral Trends: IT Sector Outperforms While PSU Banks Lag

Out of 38 sectors tracked, only five recorded gains, while 33 sectors declined, underscoring a broad-based market weakness. The BSE IT sector emerged as the top performer, registering a gain of 0.81%. This sectoral strength was supported by select large-cap IT stocks, with Wipro leading the pack among large caps by adding 1.78% to its share price. Mid-cap IT companies also showed resilience, with Hexaware Technologies advancing by 3.20%.

Conversely, the NIFTY PSU Bank sector was the most significant laggard, falling by 3.36%. Large-cap public sector banks faced notable selling pressure, with Punjab National Bank declining by 4.94%. Indian Bank, a mid-cap PSU bank, recorded a sharper fall of 5.59%, while Hampton Sky, a small-cap stock, was the day's biggest loser with a 7.91% drop.

Market Capitalisation Segments: Mid and Small Caps Under Pressure

Market capitalisation segments reflected the cautious mood, with the BSE100 large-cap index falling by 0.42%. Mid-cap stocks experienced a steeper decline of 1.12%, while small-cap stocks shed 0.56%. Despite this, some small-cap stocks bucked the trend, with OnMobile Global surging by 13.72%, marking the highest gain among small caps.

Other notable gainers in the BSE500 index included Bombay Burmah, which rose by 4.78%, Sonata Software with a 4.61% increase, and Neuland Laboratories advancing 4.58%. On the downside, Indian Bank, KNR Construction, and Wockhardt were among the top decliners, falling between 4.99% and 5.59%.

Foreign Institutional Investors and Domestic Institutional Investors Activity

Investor participation from foreign institutional investors (FIIs) and domestic institutional investors (DIIs) remained subdued, reflecting the cautious market environment. While detailed net inflow or outflow figures were not disclosed, the overall market trend suggests limited buying interest from FIIs amid global uncertainties. DIIs appeared to maintain a defensive stance, with selective buying in IT and defensive sectors but offset by selling in banking and financial stocks.

Global Cues and Their Impact on Indian Markets

Global markets exhibited mixed signals, with major indices in the US and Europe showing modest gains, while Asian markets were largely subdued. Concerns over inflationary pressures and central bank policies continued to influence investor sentiment worldwide. The Indian market's cautious stance aligns with these global developments, as investors weigh domestic fundamentals against external risks.

Top Gainers and Losers: A Closer Look

Among large caps, Wipro's 1.78% gain was notable, supported by steady demand for IT services and positive outlooks in digital transformation projects. Hexaware Technologies, a mid-cap IT stock, outperformed with a 3.20% rise, reflecting sectoral strength. On the small-cap front, OnMobile Global's 13.72% surge stood out, possibly driven by company-specific developments or renewed investor interest.

On the losing side, Punjab National Bank's 4.94% decline weighed heavily on the PSU banking sector. Indian Bank's 5.59% fall and Hampton Sky's 7.91% drop further contributed to the negative sentiment in mid and small caps. Other significant decliners included KNR Construction and Wockhardt, which fell by 5.45% and 4.99%, respectively.

Technical Indicators and Market Outlook

From a technical perspective, the Sensex's position above the 50 DMA, which itself is above the 200 DMA, suggests that the broader trend remains intact despite short-term volatility. However, the current retreat from the 52-week high indicates profit-booking or cautious positioning by market participants. The weak advance-decline ratio and sectoral divergence highlight the uneven nature of the market's internal strength.

Investors may look for confirmation of sustained buying interest in leading sectors such as IT, while monitoring the performance of banking and financial stocks closely. Global developments, including central bank policy announcements and geopolitical events, will continue to influence market direction in the near term.

Conclusion

The Indian equity market's subdued performance on 3 December 2025 reflects a cautious investor stance amid sectoral disparities and mixed global cues. While the IT sector provided some respite with modest gains, the broader market was weighed down by declines in PSU banks and mid-cap stocks. Market breadth remained weak, and institutional activity suggested a wait-and-watch approach. Technical indicators point to a stable medium-term trend, but near-term volatility may persist as investors digest domestic and international developments.

Market participants are advised to monitor sectoral trends closely and consider the evolving global environment when making investment decisions.

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