Nifty, Sensex Seen Flat on Year End as FII Outflows Continue for 6th Day

Pre-Market Update at 7:44 AM: Indian equity benchmarks Sensex and Nifty 50 are likely to open flat on Wednesday, December 31, the final trading session of 2025, amid thin volumes and muted global cues. Gift Nifty was trading marginally higher by 14 points, or 0.09 per cent, around the 26,117 level, indicating a subdued start for domestic markets. Most Asian markets such as Japan, South Korea, and Thailand are closed today due to New Year’s Eve, adding to low trading activity across the region.

Foreign Institutional Investors remained net sellers on Tuesday, December 30, selling equities worth Rs 3,844.02 crore and extending their selling streak to a sixth consecutive session. In contrast, Domestic Institutional Investors continued their strong buying momentum, purchasing equities worth Rs 6,159.81 crore, marking their 47th straight session of net inflows.

Indian equity markets ended nearly flat on Tuesday amid muted global cues and thin year-end trade. The Nifty 50 slipped 3.25 points to close at 25,938.85, while the Sensex eased 20.46 points to end at 84,675.08. Bank Nifty outperformed, gaining 0.41 per cent to close above the 59,000 level. Persistent foreign fund outflows and broad-based profit booking weighed on sentiment, with the Nifty down nearly 0.9 per cent over the last three sessions and the Sensex falling over 1 per cent across four sessions.

On the sectoral front, five of the eleven indices ended higher. Nifty Metal led the gains with a rise of 2.03 per cent, while PSU Bank and Auto stocks advanced over 1 per cent each. Realty and IT stocks underperformed, declining 0.84 per cent and 0.74 per cent, respectively. Broader markets lagged the benchmarks, with the Nifty Midcap 100 and Smallcap 100 indices slipping 0.15 per cent and 0.28 per cent.

US equity markets ended Tuesday’s volatile session slightly lower as losses in technology and financial stocks outweighed gains in communication services. The Dow Jones Industrial Average fell 94.87 points, or 0.20 per cent, to close at 48,367.06. The S&P 500 slipped 9.50 points, or 0.14 per cent, to 6,896.24, while the Nasdaq Composite declined 55.27 points, or 0.24 per cent, to settle at 23,419.08.

Minutes from the US Federal Reserve’s December policy meeting showed that the central bank opted for a rate cut only after extensive discussions over potential economic risks. The Fed is scheduled to meet again on January 27–28, and markets largely expect policy rates to remain unchanged.

The US dollar strengthened on Tuesday following the release of the Fed minutes, with investors closely analysing signals on future interest rate movements. The dollar index rose 0.19 per cent to 98.19. Despite the recent rise, the dollar is on track for its weakest annual performance since 2017, down about 9.5 per cent in 2025.

Gold and silver prices edged lower on Wednesday but remained set for historic annual gains. Spot gold slipped 0.3 per cent to USD 4,334.20 per ounce after hitting an all-time high of USD 4,549.71 last week. US February gold futures declined 1 per cent to USD 4,346.50 per ounce, while silver fell 1.6 per cent to USD 75.09 per ounce.

Oil prices are heading for their steepest annual decline since the pandemic-hit year of 2020, pressured by concerns over excess supply. US benchmark West Texas Intermediate slipped below USD 58 per barrel and is down nearly 20 per cent in 2025, while Brent crude for March delivery hovered above USD 61 per barrel. Rising output from OPEC and other major producers, coupled with slower global demand growth, has reinforced fears of a prolonged supply glut. In the near term, markets remain focused on an upcoming OPEC meeting, bearish US industry data, and ongoing geopolitical developments.

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