Indian equity benchmarks opened in the red on Tuesday, December 2, 2025, retreating from their recent record highs. The sell-off was primarily driven by weakness in banking sector stocks and continued selling pressure from foreign institutional investors.
Market Retreats from Peak
After scaling a fresh intra-day record in the previous session, the benchmark 30-share BSE Sensex declined sharply during initial trade. The index fell by 380.02 points to settle at 85,261.88. Similarly, the broader Nifty 50 also witnessed significant downward pressure, mirroring the weakness in the headline index.
Key Factors Behind the Fall
The early trade decline was attributed to two major factors. Firstly, banking stocks emerged as the top drag on the indices, with major lenders seeing profit-booking after their recent rally. Secondly, the market sentiment was dampened by sustained outflows of foreign funds (FIIs), which have been pulling capital out of Indian equities. This combination of sector-specific weakness and reduced foreign appetite created a perfect storm for the downturn.
Context and Market Outlook
The drop comes as a pause in the market's record-breaking rally. Analysts suggest that the decline represents a healthy correction after a sustained upward move. Investors are now closely watching for domestic cues and global market trends to gauge the next direction. The focus will be on whether the banking sector stabilizes and if foreign institutional investor sentiment improves in the coming sessions.
While the early trade was negative, market participants are assessing if this is a temporary blip or the start of a broader consolidation phase. The levels around which the Sensex finds support will be crucial for determining the near-term trend.
