The benchmark equity indices Sensex and Nifty settled lower on Friday amid profit booking in a holiday-truncated week, with sustained selling by foreign institutional investors (FIIs) weighing on sentiment.
Falling for the third consecutive day, the Sensex dropped 367.25 points or 0.43 percent to settle at 85,041.45. During the day, it tanked 470.88 points or 0.55 percent to 84,937.82.
The Nifty declined by 99.80 points or 0.38 percent to 26,042.30, registering its second day of decline.
Despite the subdued trade on Friday, Nifty and Sensex are up about 0.4 percent each this week, poised to snap a three-week losing run, led by metals on a pick-up in demand in top consumer China, weakness in the US dollar and a stable U.S. growth outlook.
1) Rupee decline: The rupee depreciated 23 paise to 89.94 against the US dollar, dragged by foreign fund outflows and a recovery in crude oil prices. Forex traders said a negative trend in domestic equities, dollar demand from importers and uncertainty over trade deals further dampened sentiment.
At the interbank foreign exchange, the rupee opened at 89.84 against the dollar but moved lower to 89.94, compared to its previous close of 89.71 on Wednesday. Forex and equity markets were closed on Thursday on account of Christmas.
2) FII selling: The foreign institutional investors sold shares worth Rs 1,721.26 crore on Wednesday, marking the third straight session of net selling.
"Higher US GDP growth of 4.3% for the third quarter of 2025 is imparting resilience to the US market. The high and rising profitability of US companies, including the AI ones, might nudge other FIIs, particularly the fleet footed hedge funds, to increase selling in India in the near-term," said Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments.
3) Crude rises: In the global markets, crude oil prices edged higher after the US ordered increased economic pressure on Venezuelan oil shipments and carried out airstrikes against Islamic State militants in northwest Nigeria. Brent crude futures rose 0.4 per cent to USD 62.48 a barrel, while US West Texas Intermediate crude gained or 0.4 percent to USD 58.58 a barrel.
4) Profit booking: Profit booking was seen across the key sectors. Shriram Finance and Sun Pharmaceutical Industries were among the top laggards in the Nifty50 pack, declining up to 2 percent intraday.
"With only four more trading days left for the year 2025, what looked like a Santa rally, appears to be running out of steam. In the absence of fresh triggers like a US-India trade deal, the market is likely to consolidate around the present levels," added Vijayakumar.
The price action indicates selling pressure in Indian markets at near record high levels and a lack of follow-through buying, suggesting short-term exhaustion, says Amruta Shinde, analyst at Choice Equity Broking.
On the technical front, Anand James, chief market strategist at Geojit Investments Limited, said the 26,100 level on the Nifty remained a key downside marker for the second consecutive session. He noted that the formation of an “evening star” candlestick pattern suggested the possibility of further slippage towards the 25,935–25,850 zone. A move above 26,325, however, could open the way for gains towards the 26,550–26,850 range, he added.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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