Indian equity benchmarks, the Sensex and Nifty 50, are expected to open with minimal change on Wednesday, December 31, marking the final trading session of 2025. Activity is likely to be subdued due to thin holiday trade globally.
Market Snapshot and Previous Close
On Tuesday, December 30, domestic indices ended nearly flat. The Sensex closed at 84,675.08, down 20 points or 0.02%, while the Nifty 50 settled at 25,938.85, slipping 3 points or 0.01%. The market witnessed volatility on the monthly expiry day, with cautious sentiment prevailing despite some supportive global signals.
Vinod Nair, Head of Research at Geojit Investments Limited, noted that selective value buying and a stronger rupee provided some support. However, persistent foreign institutional investor (FII) outflows kept overall mood restrained. Sectorally, auto and metal stocks gained, the latter aided by higher realisations. Public sector bank stocks also advanced on improved asset quality.
Key Global and Domestic Cues for Today
Early signals point to a marginally positive start. The Gift Nifty was trading around the 26,127 level, up 24 points or 0.09% from the previous close of Nifty futures.
Globally, several Asian markets, including Japan, South Korea, and Thailand, are closed for New Year's Eve. Despite this, Asian equities are on track for their strongest annual performance in six years, fueled by US Federal Reserve rate cuts and AI-led enthusiasm. The MSCI All Country World Index has climbed 21% in 2025.
Wall Street and Federal Reserve Impact
On Wall Street, major indices edged lower on Tuesday in thin year-end trading. The S&P 500 fell 0.1% to 6,894.24, the Dow Jones Industrial Average dropped 0.2% to 48,367.06, and the Nasdaq composite declined 0.2% to 23,419.08. Technology and AI-focused stocks remained under pressure.
Minutes from the US Federal Reserve's December meeting revealed a closely balanced debate among policymakers regarding interest rate cuts. The Fed's next meeting is scheduled for January 27–28, with markets largely expecting rates to remain steady.
Commodities and Currency Movements
The US dollar advanced slightly but is headed for its worst annual performance since 2017, with the dollar index down nearly 10% for the year.
In commodities, gold and silver prices traded lower but are set for historic annual gains. Spot gold was down 0.3% at $4,334.20 per ounce but has rallied 66% in 2025, potentially its largest annual gain since 1979. Silver has skyrocketed 157% year-to-date.
Oil prices tell a different story, heading for their steepest annual decline since 2020. US benchmark West Texas Intermediate traded below $58 a barrel, down nearly 20% for the year, weighed down by fears of a supply surplus.
Outlook for Indian Markets
As 2025 draws to a close, the Indian market is anticipated to move sideways in the near term. Investors are awaiting more concrete outcomes from US-India trade talks and the upcoming third-quarter corporate results season for fresh directional cues. The dominant theme for the final session remains cautious consolidation amid global year-end closures.
