Indian equity indices closed weak on December 8th, with the Nifty slipping below the 26,000 marks. Investors stayed cautious ahead of this week’s Fed policy outcome. Even with strong domestic growth data and the RBI’s recent rate cut, near-term sentiment remains weighed down by global rate worries, persistent FII selling, and continued pressure on the rupee. Volatility increased as Japanese bond yields climbed to multi-year highs, heightening worries about a possible unwinding of the yen carry trade. At the close, the Sensex fell 609.68 points (0.71%) to 85,102.69, while the Nifty declined 225.90 points (0.86%) to settle at 25,960.55. The Midcap index slipped 1.8%,while the small-cap index fell 2.6%. All the sectoral indices ended in the red with realty down nearly 3.5%, while media, PSU Bank, telecom down more than 2.5% each.

Nifty Outlook

The index formed a sizable bear candle with a lower high and a lower low signaling lack of follow through to Friday’s strong pullback as the index closed below the 26,000 levels. Going ahead, a follow through weakness below Monday’s low (25890) will signal extension of the decline towards 25750-25700 levels. While holding above the Monday’s low will signal consolidation in the range of 26,200-25,900 in the coming sessions ahead of the US FOMC rate decision. Key support lies at 25,900–25,700, which aligns with the bullish gap from November 12, the 50-day EMA, and the lower band of the rising channel.

Bank Nifty Outlook

Bank Nifty has formed a bearish candlestick pattern with a long lower shadow signaling lack of follow through to previous session strong pullback post RBI monetary policy outcome. Index on expected lines is seen consolidating and forming a base in the range of 58500-60100. We expect the index to extend the current consolidation in the coming sessions. Only a follow through strength above the last week high (60114) will open further upside towards 60,400 and then towards 61,000 levels in the coming weeks. Key short-term support is placed at 58,200-58,600 levels being the confluence of the recent low and the major breakout area. Holding above the support area will keep the short-term bias positive.

Ashika Institutional Equities

Indian markets witnessed sharp broad-based selling on Monday, with the benchmark Nifty sliding 1.04%, breaking below the crucial psychological and technical support level of 26,000 and sustaining under it through the session. Realty stocks led the decline, tumbling nearly 3.51%, followed by PSU Banks, which dropped 3.09%. Pressure was equally evident in the broader markets, with both the Midcap and Smallcap indices logging notable losses. Not a single sector managed to close in the green, underscoring the extent of the market-wide sell-off. In the derivatives segment, the advance–decline ratio was sharply skewed towards the bears, with 207 stocks ending in the red while only 7 managed gains. Significant open interest build-up was observed in counters such as INDIGO, GODREJPROP, HINDUNILVR, MAZDOCK, and BDL, indicating heightened activity and potential positioning.

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On the Nifty options front, the highest call open interest stands at 26,100 and 26,200, suggesting strong overhead resistance, while the maximum put open interest is placed at 25,900 and 25,800, indicating key support zones traders are watching. The PCR has slipped to 0.49. Globally, sentiment remained cautious as participants awaited the US Federal Reserve’s monetary policy decision later this week.