India's benchmark equity indices closed lower for the third straight session on Friday, December 26, 2025, as persistent selling by foreign funds weighed heavily on market sentiment.
Market Performance and Key Drivers
The 30-share BSE Sensex declined by 367 points, continuing a downward trend that has now lasted three trading days. The primary catalyst for this extended sell-off was identified as sustained foreign institutional investor (FII) outflows. Domestic investors struggled to counterbalance the selling pressure from overseas funds, leading to a broad-based decline across several sectors.
Divergent Trends in Asian Markets
While Indian markets faced headwinds, key Asian indices presented a mixed picture. Major markets in the region closed in positive territory. Japan's Nikkei 225 and South Korea's Kospi both ended the day with gains. China's Shanghai SSE Composite index also settled higher. Notably, markets in Hong Kong were closed for the day, which may have influenced regional trading dynamics.
Implications and Market Outlook
The consecutive declines highlight the sensitivity of the Indian market to global fund movements. The sustained FII selling, often a reaction to global macroeconomic cues or relative valuation assessments, has introduced volatility. Analysts suggest that market direction in the near term will likely depend on the flow of foreign capital and domestic institutional support. The divergence with other Asian markets underscores the unique set of factors influencing investor decisions in India at the close of 2025.
Investors are advised to monitor upcoming economic data and corporate results for clearer directional cues, as the market seeks to find a stable footing after this period of correction.
