Indian Benchmark Indices See Sharpest Drop in 2 Months; Small Cap 100 Hits 7-Month Low

Market Update at 4:00 PM: Indian equity markets witnessed a sharp sell-off on Monday, December 8, as cautious global sentiment and investor nervousness ahead of the US Federal Reserve’s policy meeting weighed heavily on sentiment. Both benchmark indices snapped their two-day winning streak and recorded their steepest Intraday fall in nearly three months. 

The Nifty 50 declined by 225.90 points or 0.86 per cent to close at 25,960.55, while the Sensex fell 609.68 points or 0.71 per cent to end at 85,102.69. Market volatility spiked, with India VIX rising 7.85 per cent, signalling increased uncertainty across the broader market. The Nifty 50 also saw trading volumes surpassing the 20-day average, highlighting intensified activity during the downturn.

InterGlobe Aviation (IndiGo) emerged as the biggest drag on the Nifty 50, slipping 8.32 per cent following widespread operational disruptions. A severe staffing shortage recently led to the cancellation of thousands of flights, pressuring India’s largest airline and contributing significantly to the day’s market weakness. 

All 11 sectoral indices closed in the red, reflecting broad-based selling. Nifty Realty registered the steepest decline of 3.53 per cent, hitting a seven-month low and posting its biggest fall since July 28. Nifty PSU Bank and Nifty Media fell between 2 to 3 per cent, while Nifty FMCG, Nifty Pharma, Nifty Energy and Nifty Auto recorded declines of over 1 per cent each. Nifty IT was the least affected, down just 0.29 per cent.

Broader markets faced deeper pressure, with the Nifty Midcap 100 falling 1.83 per cent, its sharpest drop since September 26, and slipping below its 50-day exponential moving average after two months. The Nifty Smallcap 100 tumbled 2.61 per cent, touching a seven-month low and recording its biggest decline since April 7. 

Market breadth remained sharply negative, with 580 stocks advancing and 2,580 declining out of the 3,247 traded on the NSE, while 87 remained unchanged. A total of 41 stocks touched their 52-week highs, whereas 429 hit their 52-week lows, underscoring the intense selling pressure. Additionally, 69 stocks were locked in Upper Circuits while 138 were stuck in Lower Circuits, further indicating broader market stress.

Market Update at 2:15 PM: Indian stock markets turned flat on Monday, December 1, after touching fresh record highs during the morning session. The sentiment came even as India’s Q2FY26 gross domestic product (GDP) growth surged to a six-quarter high of 8.2 per cent, reinforcing expectations of economic resilience.

By 2 PM, the BSE Sensex was at 85,666.40, down 40.27 points or 0.05 per cent, while the NSE Nifty50 slipped 19 points or 0.07 per cent to 26,183.95. Earlier in the day, the Sensex had scaled a record high of 86,159 and the Nifty touched 26,325.8.

Several heavyweight stocks supported the indices, with Adani Ports, Bharat Electronics, SBI, Tata Motors PV, Tata Steel, L&T, Trent, HCL Tech, Infosys, Reliance Industries, M&M, NTPC, and Sun Pharma emerging as Top Gainers. These counters advanced up to 1.3 per cent. Meanwhile, ITC, Bajaj Finance, and Titan were the only laggards, declining up to 1.13 per cent.

In the broader markets, the Nifty MidCap index hovered flat with a slight negative bias, whereas the Nifty SmallCap index gained 0.25 per cent. Sectorally, the standout performer was the Nifty Bank index, which soared 0.5 per cent to hit a historic milestone by crossing the 60,000 level for the first time, touching a new peak of 60,114.05. The Nifty Metal and Nifty PSU Bank indices also advanced 0.8 per cent each.

Market Update at 12:30 PM: Indian equities traded in the red on Monday as the absence of strong domestic triggers weighed on investor confidence.

At 12 PM, the BSE Sensex stood at 85,385.43, down 326.94 points or 0.38 per cent, while the NSE Nifty50 was at 26,058.15, declining 128.30 points or 0.49 per cent. Both frontline indices extended losses as broader market sentiment remained muted.

The session saw notable pressure on heavyweights. Bajaj Finance, BEL, NTPC, Asian Paints, Power Grid, Trent, Sun Pharma, and ICICI Bank emerged as the top laggards on the Sensex. In contrast, Eternal, Tech Mahindra, TCS, Tata Motors PV, Infosys, HCL Tech, Tata Steel, and Reliance Industries (RIL) provided some cushion as leading gainers.

Broader markets also exhibited weakness. The Nifty MidCap index slipped 0.39 per cent, while the Nifty SmallCap index registered a deeper cut of 0.77 per cent, indicating broader selling pressure beyond frontline stocks.

Sectorally, the market displayed a mixed trend. Nifty Realty, PSU Bank, and Pharma indices were among the key losers, falling between 0.3 per cent and 0.5 per cent. On the positive side, Nifty IT advanced 0.5 per cent, supported by strength in major technology stocks, followed by a mild uptick in the Nifty Metal index, which gained 0.2 per cent.

Market Update at 10:00 AM: India’s equity benchmarks opened lower on Monday as investors remained cautious ahead of the U.S. Federal Reserve’s upcoming policy meeting. The Nifty 50 fell 0.1 per cent to 26,159.80, while the BSE Sensex slipped 0.1 per cent to 85,624.84 at 9:15 a.m. IST.

Market sentiment was weak across sectors, with ten of the sixteen major industry groups opening in the red. The broader Midcap and Smallcap indices were largely unchanged, reflecting a muted start for mid- and Small-Cap segments.

Globally, investors are awaiting the Fed’s rate decision later this week, with expectations leaning toward an interest-rate cut by the world’s most influential central bank. This cautious global backdrop kept domestic sentiment subdued.

InterGlobe Aviation, the operator of IndiGo and India’s largest airline by market share, declined nearly 5 per cent after receiving a regulatory warning following thousands of flight cancellations last week. The stock was the biggest drag on the Nifty 50 in early trade.

Pre-Market Update at 7:40 AM: Indian equity markets are expected to open on a flat note on Monday, December 8, as global sentiment remains muted. GIFT Nifty traded near the 26,322 level, showing a discount of around 12 points compared to the previous Nifty futures close, indicating a subdued start for benchmark indices.

Asian markets opened cautiously as investors assessed strained China–Japan relations, multiple central bank meetings scheduled this week, and overall global risk appetite heading into the new year. These factors are likely to influence early market direction in India as well.

Domestically, investor attention will focus on several key developments through the week, including progress in India–Russia economic cooperation, the U.S. Federal Reserve’s policy outcome, India’s CPI inflation print, updates on India–U.S. trade discussions, foreign investment trends, movement in gold prices, and geopolitical developments globally.

Market sentiment in India improved last week following the Reserve Bank of India’s decision to cut the repo rate by 25 basis points and inject Rs 1.45 lakh crore of liquidity through bond purchases and dollar–rupee swap operations. This accommodative stance boosted buying interest and supported a strong close on Friday.

The India–U.S. trade relationship also gained traction as U.S. Under Secretary of State for Political Affairs Allison Hooker began a five-day visit to India, aimed at strengthening strategic and economic ties. The U.S. embassy noted that the visit aligns with President Donald Trump’s agenda to reinforce partnerships across the Indo-Pacific region.

On the bilateral front, President Vladimir Putin and Prime Minister Narendra Modi concluded their annual summit on Friday, setting an expanded roadmap for cooperation. Both nations aim to boost bilateral trade to USD 100 billion by the end of the decade. India currently accounts for less than 2 per cent of Russia’s total imports, and the renewed focus extends beyond Defence and energy sectors.

Institutional flows reflected mixed sentiment. On Friday, December 5, Foreign Institutional Investors were net sellers, offloading equities worth Rs 438.90 crore. In contrast, Domestic Institutional Investors continued to support the market with net inflows of Rs 4,189.17 crore, marking their 31st straight session of buying.

Equity indices closed higher on Friday following the RBI’s rate cut. The Nifty 50 rose 152.70 points (0.59 per cent) to 26,186.45, while the Sensex added 447.05 points (0.52 per cent) to finish at 85,712.37. India VIX fell 4.6 per cent, though the Nifty ended the week slightly lower by 0.06 per cent, breaking a three-week rally.

On Wall Street, U.S. markets edged closer to record highs on Friday. The S&P 500 gained 0.2 per cent, finishing just 0.3 per cent below its all-time closing high from October. The Dow Jones Industrial Average rose 0.2 per cent, and the Nasdaq Composite advanced 0.3 per cent. Shares of Warner Bros Discovery surged 6.3 per cent after Netflix agreed to a USD 72 billion acquisition of its TV, film, and streaming assets, ending a tense multi-week bidding contest. Netflix shares slipped 2.9 per cent, while Paramount Skydance dropped 9.8 per cent.

U.S. consumer spending grew 0.3 per cent in September following a downwardly revised 0.5 per cent rise in August, aligning with market expectations. The PCE Price Index — the Federal Reserve’s preferred inflation gauge — increased 0.3 per cent in September and 2.8 per cent year-on-year.

The U.S. dollar held steady on Monday, supported by anticipation around global central bank decisions. The euro traded at USD 1.1644, and the yen remained stable at 155.28 per dollar after a sharp November decline.

Gold traded at USD 4,202 per ounce, slightly lower after touching USD 4,259 on Friday, while silver remained close to its all-time high. Crude oil prices firmed, supported by expectations of lower interest rates and concerns over potential supply disruptions from Russia and Venezuela. Brent crude rose 0.2 per cent to USD 63.85, and U.S. crude climbed 0.2 per cent to USD 60.18 per barrel.

For today, Kaynes Technologies, Sammaan Capital and Bandhan Bank will remain on the F&O ban list.

Disclaimer: The article is for informational purposes only and not investment advice.