The Indian equity market is bracing for another subdued session on Thursday, December 18, with benchmark indices likely to open flat but with a negative bias. This comes after three consecutive sessions of decline, driven by persistent weakness in global markets and domestic headwinds.
Market Outlook and Key Triggers
The trends on Gift Nifty, which trades on the Singapore exchange, point towards a muted start for the domestic market. The indicator was trading near the 25,871 level, marking a decline of 15 points or 0.06% from the previous close of Nifty futures. This sets the stage for the Nifty 50 and Sensex to extend their losing streak.
On Wednesday, December 17, the market extended its decline for the third straight day. Investor sentiment was weighed down by a combination of factors including the continued weakness of the Indian rupee, sustained outflows of foreign portfolio investment (FPI), and delays in the anticipated India-US trade agreement. The Sensex dropped 120 points, or 0.14%, to close at 84,559.65. Similarly, the Nifty 50 fell by 42 points, or 0.16%, ending the session at 25,818.55.
The selling pressure was even more intense in the broader market. The BSE Midcap index declined by 0.53%, while the Smallcap index witnessed a sharper fall of 0.85%. This widespread sell-off led to a significant erosion of investor wealth. The total market capitalisation of companies listed on the BSE plummeted to approximately ₹466 lakh crore from ₹467.64 lakh crore in the prior session, translating to a staggering single-day loss of about ₹1.6 lakh crore.
Analyst Views on Sensex and Nifty 50
Market experts are closely watching key technical levels that could determine the near-term direction of the indices. Shrikant Chouhan, Head of Equity Research at Kotak Securities, noted that the Sensex struggled to maintain early gains and faced resistance near the 84,900 mark. He stated that the formation of a bearish candle on the daily chart signals building pressure. According to Chouhan, the intraday sentiment remains weak, but a fresh sell-off might only materialize if the index breaks below the 84,300 support level. If that occurs, the market could retest the 84,000–83,800 zone. Conversely, a sustained move above 84,900 could improve sentiment and push the index towards 85,200–85,400.
Echoing similar technical observations, Mayank Jain, Market Analyst at Share.Market, highlighted the 84,000–84,300 zone as a critical support area, as it aligns with the 50-day moving average and recent swing lows. On the higher side, he identified the 85,000–85,100 range as immediate resistance, reinforced by significant call open interest at the 85,000 strike in the weekly options market.
For the Nifty 50, Osho Krishan of Angel One pointed out that the index is currently trading between its 20-day and 50-day Exponential Moving Averages (EMAs), which are converging—a sign that a decisive move is imminent. He identified immediate support in the 25,750–25,700 range, coinciding with the 50-day EMA. A breakdown below this level could disrupt the near-term structure. Resistance is seen at the 20-day EMA near 25,950, followed by the psychological 26,000 level.
Bank Nifty and Derivative Signals
The banking index is also entering a crucial phase. Analysts believe that a narrowing trading range may soon lead to a sharper directional move. Hrishikesh Yedve of Asit C. Mehta Investment Intermediates Ltd. stated that if the Bank Nifty holds the 58,800 level, short-term relief might be possible. However, a firm break below this support could extend the weakness towards 58,500–58,000. On the upside, the 60,000–60,120 zone will act as stiff resistance.
The derivatives data reflects growing caution among market participants. Dhupesh Dhameja, Derivatives Research Analyst at SAMCO Securities, highlighted that the sharp drop in the Put-Call Ratio (PCR) to 0.55 indicates rising caution and aggressive selling at higher levels. He added that with the PCR nearing oversold territory, brief phases of short-covering cannot be ruled out. Significant call open interest at the 26,000 strike has created a strong resistance zone for the Nifty, while put open interest at 25,500 offers notable support.
In light of the current volatility driven by mixed global cues and currency fluctuations, analysts like Ajit Mishra of Religare Broking advise investors to adopt a stock-specific approach with controlled position sizes until clearer trends emerge.
