The Indian stock markets ended lower on December 26, 2025, as profit booking in select heavyweight stocks and weakness in IT, banking, and healthcare sectors kept sentiment under pressure during thin year-end trading volumes.

Market Closing Summary

The BSE Sensex ended at 85,041.45, down 367.25 points or 0.43%, while the NSE Nifty50 closed lower by 99.80 points or 0.38% at 26,042.30. The market continues to consolidate as investors await fresh triggers heading into 2026.

Top Gainers

  • Titan Company – Strong consumer demand drives gains
  • NTPC – Power sector optimism continues
  • Hindustan Unilever – FMCG sector shows resilience

Top Losers

  • Bajaj Finance (-1.52%) – NBFC sector under pressure
  • Asian Paints (-1.42%) – Building materials weakness
  • HCL Technologies (-1.36%) – IT sector selloff continues

Year-End Rally and Market Recovery

As the final trading sessions of 2025 unfold, Indian equity markets have staged a dramatic year-end rally, positioning the BSE Sensex and Nifty 50 as premier performers among major emerging markets. While much of 2025 was defined by valuation correction and significant foreign fund outflows, December witnessed what analysts are calling the “Great Pivot.”

This turnaround was driven by landmark tax reforms, a stabilizing rupee, and massive domestic liquidity support from retail investors through systematic investment plans (SIPs).

FII and DII Activity

Foreign institutional investors (FIIs) remained net sellers for the eighth consecutive week, offloading equities worth Rs. 252 crore. However, domestic institutional investors (DIIs) provided strong support with net inflows of Rs. 12,062 crore.

The SIP phenomenon continues to provide a floor for Indian markets, with monthly inflows surging past Rs. 29,000 crore throughout 2025 – a testament to retail investors’ long-term confidence in Indian equities.

RBI Rate Cut Impact

Earlier in December, Indian markets enthusiastically responded to the RBI’s surprise 25 basis points rate cut. This unexpected move, combined with sharply lower inflation forecasts and supportive liquidity measures, triggered risk-on sentiment across equities.

Rate-sensitive sectors such as automobiles, real estate, and NBFCs led the gains following the announcement, benefiting from reduced borrowing costs.

Rupee and Currency Dynamics

The Indian rupee briefly touched an all-time low of 91.07 against the U.S. dollar, reflecting global dollar strength and capital outflows. However, potential intervention by the Reserve Bank of India stabilized the rupee, allowing it to close below the psychological mark of 90.

Technical Outlook

Technically, the market remains in a consolidation phase. The 26,100 level continues to act as crucial support for the Nifty. Holding above this zone keeps the possibility of a fresh upswing intact, with 26,300-26,100 forming the near-term trading range.

Indian equities are expected to trade in a narrow range this week amid lack of triggers and reduced trading activity due to holidays across global markets.

Looking Ahead to 2026

Market participants remain cautiously optimistic about 2026, with key factors including:

  • Global interest rate trajectory and Fed policy decisions
  • Domestic economic growth momentum
  • Corporate earnings recovery
  • FII flow reversal potential
  • Union Budget 2026 expectations

Investors are advised to maintain a diversified portfolio and consider accumulating quality stocks on dips during this consolidation phase.