Sensex, Nifty edge lower in thin year-end trade ahead of earnings

Indian stocks opened marginally lower on Friday, with the Sensex and Nifty struggling for direction amid thin year-end trading volumes, as investors held back on fresh bets ahead of upcoming earnings cues.

The Sensex fell 52 points, or 0.06%, to open at 85,356.67, while the Nifty 50 slipped 13 points, or 0.05%, to 26,129.20. Market participants said any meaningful upside from here would hinge on earnings momentum rather than near-term flows.

On the Sensex, losses were led by Bajaj Finance, Sun Pharmaceutical Industries, Eternal, Tata Steel and Tata Consultancy Services, with the stocks down between 0.5% and 2% in early trade.


Broader markets also eased, with both the mid-cap and small-cap indices slipping about 0.1% each.

Defence-related shares bucked the softer tone. Bharat Electronics and Bharat Dynamics rose as much as 3% ahead of a meeting of the Defence Acquisition Council later in the day. The council, chaired by Defence Minister Rajnath Singh, is expected to consider proposals for emergency procurement of critical weapons and military equipment, a move that could accelerate fresh orders for the domestic defence industry.

After scaling record highs in November following a 14-month climb, the Sensex and Nifty have struggled to find momentum in December, down roughly 0.4% and 0.2%, respectively, so far this month.

Expert views

With only four more trading days left for the year 2025, what looked like a Santa rally, appears to be running out of steam, said Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, adding that in the absence of fresh triggers like a U.S.-India trade deal, the market is likely to consolidate around the present levels.

"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. The sustained buying by the cash rich DIIs will support the market and prevent a sharp pull back. The ideal investment strategy for investors now is to remain invested in high quality large caps and slowly accumulate them on declines. A rally in the market in the early stage of 2026 is on the cards. Investors should give high weightage to value while deciding to invest. Irrational valuations in some of the IPOs and the willingness of the newbie investors to buy stocks at excessive valuations are reflections of exuberance in the market," said Vijayakumar.

Global Markets

Asian equities pushed higher on Friday, with regional benchmarks touching their strongest levels in six weeks, as investors looked to cap the year on a firmer note even as a softer yen kept currency intervention risks in focus.

Trading conditions were thin, with markets in Australia, Hong Kong and much of Europe closed. Still, risk appetite improved this week as investors attempted a year-end rally.

Japan’s Topix index climbed to a record high and was last up about 0.5%. South Korea’s benchmark rose 0.6%, extending its advance for the year to roughly 72% and cementing its position as the world’s best-performing major equity market in 2025.

Chinese blue-chip shares also edged higher, with the index up 0.27% and on track for an 18% gain for the year, its strongest annual performance since 2020.

The moves lifted MSCI’s broad Asia-Pacific index to its highest level since mid-November. The gauge was last up 0.4% and has risen about 25% so far this year.

FII/DII Tracker

On the institutional front, Foreign Institutional Investors (FIIs) sold equities worth a little over Rs 1,721 crore on December 24, while Domestic Institutional Investors (DIIs) were net buyers to the tune of Rs 2,381 crore.

Crude impact

Oil prices edged higher on Friday, supported by fresh geopolitical developments after the U.S. moved to tighten economic pressure on Venezuelan crude shipments and carried out airstrikes against Islamic State militants in northwest Nigeria at the request of the Nigerian government.

Brent crude futures rose 24 cents, or 0.4%, to $62.48 a barrel by 0114 GMT. U.S. West Texas Intermediate crude gained 23 cents, also 0.4%, to $58.58 a barrel.

Rupee vs Dollar

The Indian rupee weakened in early trade on Friday, slipping 22 paise to 89.93 against the U.S. dollar, as subdued moves across Asian currencies offered little directional cue. Traders said the rupee is likely to stay rangebound around the 90 level as the year draws to a close.

The dollar index, which tracks the greenback against six major peers, was on course for a weekly decline of about 0.8%, its weakest showing since July, and was little changed at 97.935 during Asian trading hours.

(with inputs from agencies)