Indian equity markets are bracing for a tepid start on Tuesday, December 30, with the benchmark indices likely to open flat but in negative territory. This cautious sentiment follows weak global cues and thin trading activity during the holiday season, reinforcing expectations of a near-term consolidation phase.
Market Outlook and Previous Session's Decline
The early signal from the Gift Nifty futures pointed towards a muted opening, with the index trading around the 25,936 mark, down 29 points or 0.11% from the previous close of Nifty futures. This comes after a downbeat session on Monday, where both key indices extended their losing streaks.
The BSE Sensex declined for the fourth consecutive session, shedding 345.91 points, or 0.41%, to close at 84,695.54. Similarly, the NSE Nifty 50 fell for the third straight day, losing 100.20 points, or 0.38%, to settle at 25,942.10. Analysts attributed the weakness to a lack of decisive triggers, muted trading, and persistent selling by foreign institutional investors (FIIs).
Vinod Nair, Head of Research at Geojit Investments, noted, "The market appears short on catalysts for further upside, with investors largely in holiday mode." He added that while the outlook for 2026 remains constructive, attention is shifting to upcoming Q3 earnings and clarity on the U.S. trade agreement. In the current climate of global trade anxiety and a weakening rupee, investors are likely to prefer large-cap stocks for their relative safety.
Global Market Influences and Key Developments
Asian markets took a pause on Tuesday after a seven-session rally, mirroring technology-led declines on Wall Street. MSCI Inc.'s Asia Pacific share gauge slipped 0.1% in early trade. For several markets like Japan, South Korea, and Thailand, Tuesday marked the final trading session of the year. Notably, the broader measure of Asian equities has surged nearly 26% in 2025.
On Wall Street, major indices edged lower in muted trading on Monday. The S&P 500 slipped 0.3% to 6,905.74, though it remains up over 17% for the year. The Dow Jones and Nasdaq Composite also fell by 0.5% each.
Commodities and Geopolitical Tensions
In the commodities space, silver stabilized after its sharpest single-day fall in over five years, trading above $71 an ounce. Gold was steady near $4,340 an ounce. Profit-booking after a strong rally and thin liquidity amplified recent volatility in precious metals.
Geopolitical tensions added to the complex global backdrop. Russia accused Ukraine of attempting to attack President Vladimir Putin's residence, threatening retaliation—a claim Kyiv dismissed as baseless. This exchange hurt prospects for a negotiated settlement in the ongoing conflict.
Oil prices held onto gains, with West Texas Intermediate trading near $58 a barrel, as traders balanced rising geopolitical risks from Venezuela, Russia, and Iran against concerns about a potential supply glut.
In currency markets, the yen strengthened on Monday as markets assessed the timing of further rate hikes in Japan. The Bank of Japan's minutes revealed policymakers debated the need to continue raising rates after a recent hike to a 30-year high of 0.75%.
As the year draws to a close, Indian markets are navigating a mix of domestic caution and global crosscurrents, with investor focus gradually turning to corporate earnings and policy developments in the new year.
