Indian stock markets began Wednesday's trading session on a negative note, with both key benchmark indices slipping into the red. The subdued opening comes amid a holiday-shortened trading week, with market activity expected to remain muted.
Market Opens in Negative Territory
At the opening bell, the BSE Sensex was trading below the 85,500 mark, while the Nifty50 hovered near 25,150. By 9:16 AM, the Nifty50 was at 26,157.20, marking a decline of 20 points or 0.076%. Similarly, the Sensex stood at 85,454.65, down by 70 points or 0.082%.
Analysts Predict Consolidation Phase
Market experts believe trading is likely to stay quiet in the coming sessions due to the Christmas holiday. They expect the market to hold firm at elevated levels and move within a narrow range, taking supportive cues from global peers.
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, shared his outlook, stating that as 2025 concludes, the market appears to be entering a consolidation phase with an upward bias. He highlighted that strong domestic macroeconomic factors and supportive earnings growth expectations for the third and fourth quarters of FY26 and for FY27 will provide fundamental support.
"The sustained domestic inflows and consistent buying by Domestic Institutional Investors (DIIs) will impart resilience to the market," Dr. Vijayakumar noted. However, he cautioned that since Foreign Institutional Investors (FIIs) might sell during rallies, a sharp breakout is unlikely. He also pointed out that the revival of the AI trade in the US could impact sentiment, potentially favoring a 'non-AI trade' in markets like India.
RBI's Move and Global Cues
Dr. Vijayakumar also commented on the recent Reserve Bank of India (RBI) announcement of an additional Open Market Operation (OMO) worth Rs 2 lakh crore. He stated this move will significantly enhance liquidity and bring down yields, which is positive for credit growth and banking stocks. "This can be a shot in the arm for banking stocks which are fairly valued," he added.
On the global front, Wall Street ended higher on Tuesday, with the S&P 500 closing at a fresh all-time high. This rally was supported by economic data, including a GDP growth number that lifted bond yields and boosted interest in growth-oriented stocks.
Following the positive lead from the US, Asian equities opened on a positive note on Wednesday. In the commodities space, gold crossed the $4,500 per ounce threshold for the first time, driven by safe-haven demand and expectations of further interest rate cuts by the US Federal Reserve next year. Silver and platinum also climbed to new record levels.
Domestic Investor Activity
In the domestic market, investor activity showed a mixed trend on Tuesday. Foreign Portfolio Investors (FPIs) were net sellers of Indian equities worth Rs 1,795 crore. In contrast, Domestic Institutional Investors (DIIs) were net buyers, purchasing equities worth Rs 3,812 crore.
