Indian equity markets closed on a weaker note as the much-anticipated year-end rally failed to sustain momentum, reflecting cautious investor sentiment amid thin trading volumes. After opening on a relatively steady footing, benchmark indices gradually drifted lower through the session as participants opted to book profits at higher levels rather than take fresh positions.

Key Highlights

• Sensex and Nifty end lower as profit booking halts year-end rally amid thin trading volumes.
• Cautious sentiment persists due to foreign outflows, global uncertainty, and lack of fresh triggers.

Market sentiment remained subdued, largely influenced by a lack of strong domestic or global triggers. With the calendar year drawing to a close, trading activity was muted as institutional investors reduced exposure and retail participation also remained limited. Continued foreign investor outflows added to the pressure, restricting any meaningful upside in frontline indices.

Sector-wise, performance was mixed. While select pockets of the market showed resilience, broader indices underperformed, highlighting a cautious approach toward mid- and small-cap stocks. Investors appeared increasingly selective, favouring companies with stable earnings visibility and stronger balance sheets over momentum-driven trades.

Global cues also played a role in shaping sentiment. Ongoing concerns around interest rate trajectories, geopolitical developments, and global economic growth kept investors on edge. In the absence of clarity on these fronts, market participants preferred a wait-and-watch approach rather than chasing short-term rallies.

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Despite the subdued close, market experts believe the overall structure of Indian equities remains intact, supported by strong domestic participation and long-term growth prospects. However, near-term volatility is expected to persist as liquidity remains constrained and global uncertainties continue to influence risk appetite. As markets head into the final stretch of the year, focus is likely to remain on earnings outlooks, macroeconomic indicators, and policy signals to determine the next directional move.