Sensex and Nifty Performance

The BSE Sensex opened the day 139.84 points lower but staged a robust recovery, gaining 595.92 points during the session to settle at 85,721.40, reflecting a 0.53% rise. This level places the Sensex just 0.51% shy of its 52-week peak of 86,159.02. The index continues to trade above its 50-day moving average (DMA), which itself remains above the 200 DMA, signalling a sustained positive trend in the medium term.

The Nifty 50 index mirrored this strength, supported by gains in heavyweight stocks and a broad-based rally across key sectors. Large caps led the charge, with the Sensex’s 0.53% gain underscoring the dominance of blue-chip stocks in the current market environment.

Sectoral Trends: IT Leads, Consumer Goods Trails

Out of 38 sectors tracked on the BSE, 25 advanced while 13 declined, indicating a market breadth tilted towards optimism. The NIFTY IT sector emerged as the top performer, rising by 1.33%, buoyed by strong buying interest in technology stocks amid positive global sentiment for the sector.

Conversely, the BSE Consumer Goods (CG) sector lagged, slipping 0.52%. This sector’s underperformance was influenced by profit booking in select large-cap consumer staples stocks, which weighed on overall sentiment.

Market Breadth and Capitalisation Segments

The advance-decline ratio across the BSE 500 index stood at 196 advances against 301 declines, translating to a breadth ratio of 0.65x. This suggests that while the headline indices gained, a larger number of stocks experienced selling pressure, reflecting selective buying concentrated in large caps.

In terms of market capitalisation, the BSE 100 large-cap index rose by 0.52%, the mid-cap index inched up by 0.06%, whereas the small-cap segment declined by 0.73%. Small caps traded largely flat throughout the session, indicating cautious investor sentiment towards riskier assets.

Top Gainers and Losers Across Market Caps

Among large caps, Indus Towers led the gainers with a 3.02% rise, supported by steady demand in the telecom infrastructure space. In the mid-cap category, M & M Financial Services recorded a notable 5.03% increase, reflecting renewed investor interest in financial services. The small-cap segment saw Zuari Agro Chemicals surge by 14.22%, marking the most significant rally among smaller stocks.

On the downside, Hindustan Unilever was the largest large-cap decliner, falling 5.20% amid profit-taking. Kaynes Technology led mid-cap losses with an 8.01% drop, while Hindustan Construction Company faced a sharp 21.16% decline, marking the steepest fall among small caps.

Foreign Institutional and Domestic Investor Activity

Foreign institutional investors (FIIs) and domestic institutional investors (DIIs) maintained active participation in the market. While detailed net inflow or outflow figures were not disclosed, the recovery in large caps and the sustained buying in IT stocks suggest continued interest from FIIs, who often favour technology and export-oriented sectors amid global economic uncertainties.

Domestic investors appeared cautious, with small caps trading flat and mid-caps showing marginal gains. This mixed participation reflects a wait-and-watch approach ahead of key global economic data releases and domestic corporate earnings announcements.

Global Cues and Their Impact

Global markets showed a mixed performance on 5 December 2025, with US indices consolidating after recent gains and European markets trading cautiously amid ongoing geopolitical concerns. Asian markets, including Japan and China, displayed modest gains, which lent some support to Indian equities, particularly in sectors with significant export exposure such as IT.

Commodity prices remained stable, with crude oil hovering near recent levels, providing some relief to inflationary pressures in India. Currency markets saw the Indian rupee maintain steady levels against the US dollar, supporting foreign investment inflows.

Outlook and Market Sentiment

The current market environment suggests a cautious optimism among investors. The Sensex’s ability to recover and trade near its 52-week high, supported by strong sectoral performances in IT and financial services, indicates underlying strength in the economy and corporate earnings prospects.

However, the subdued breadth and weakness in small caps highlight pockets of risk aversion, possibly due to global uncertainties and domestic policy considerations. Investors may continue to favour large-cap stocks with stable earnings and strong fundamentals while monitoring mid and small-cap segments for selective opportunities.

Key Stocks to Watch

Among the top gainers, Indus Towers and M & M Financial Services remain in focus due to their sectoral leadership and recent market activity. Zuari Agro Chemicals’ sharp rise in the small-cap space may attract attention from investors seeking high-growth opportunities, albeit with higher volatility.

Conversely, Hindustan Unilever’s decline may prompt investors to reassess valuations in the consumer goods sector, while the steep losses in Kaynes Technology and Hindustan Construction Company highlight the risks inherent in mid and small-cap stocks.

Conclusion

The Indian equity market’s recovery on 5 December 2025, led by large caps and the IT sector, underscores a resilient investor sentiment despite mixed breadth and sectoral divergences. The Sensex’s proximity to its 52-week high and its positioning above key moving averages suggest a positive technical backdrop. However, selective caution remains warranted given the uneven performance across market capitalisation segments and ongoing global uncertainties.

Investors are advised to monitor sectoral trends, institutional activity, and global developments closely as they navigate the evolving market landscape.

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