Indian markets open flat ahead of Christmas closing, continued FPI selling

MUMBAI: The domestic stock markets opened flat to marginally lower in early trade on Wednesday, ahead of the Christmas holiday, as continued Foreign Portfolio Investor (FPI) selling capped bullish sentiment despite supportive domestic fundamentals.

The Nifty 50 index was trading at 26,154.20, down 12.85 points, or 0.05 per cent, shortly after opening. Meanwhile, the BSE Sensex slipped 93.51 points, or 0.11 per cent, to 85,431.33 in early deals. Market experts said that while broader cues remain supportive, profit booking and foreign fund outflows are limiting upside during the holiday-shortened trading week.

Banking and market expert Ajay Bagga said, “Indian markets are pointing to another positive open at the time of writing, however, this week has seen two days of FPI selling and markets failing to break through key resistance levels. With Indian markets reaching overbought levels as per the PCR levels, we expect some selling into the holiday-shortened trading week”.

Bagga added that liquidity conditions are expected to improve following the Reserve Bank of India’s announcement of open market operations (OMOs) to inject Rs 2 lakh crore and a USD 10 billion dollar-rupee swap. These measures are likely to support liquidity and provide some relief to the Indian rupee, which he noted remains the worst-performing Asian currency in calendar year 2025.

Despite weakness in the US dollar index, with the DXY at 97.7, the rupee depreciated by five paise against the US dollar on Tuesday. Currency weakness continues to be a negative factor for a revival in FPI inflows. On Tuesday, domestic institutional investors (DIIs) purchased equities worth Rs 3,812.37 crore, while foreign institutional investors (FIIs) sold equities worth Rs 1,794.80 crore.

Ponmudi R, CEO of Enrich Money, said the Nifty is currently in a consolidation phase. “Nifty 50 current price action suggests a consolidation or breather phase just below resistance, which is typical after a strong up-move. Immediate support is placed at 26,100, backed by notable put open interest, while the 26,000-25,950 zone forms a strong demand base”, he said. He added that as long as the index sustains above 26,000 on a closing basis, the near-term outlook remains mildly bullish.

In global markets, US economic data remained strong, with Q3 GDP growth coming in at a two-year high of 4.3 per cent. Consumer spending rose 3.5 per cent, while exports recorded a strong growth of 8.8 per cent. Supported by AI-related capital expenditure and increased government defence spending, US markets ended higher, with the S&P 500 closing at a record high as the Dow and Nasdaq extended their rally for a fourth straight session.

Asian markets were largely positive on Wednesday morning, barring a slight decline in the Australian index due to concerns over potential rate hikes by the RBA in 2026. Japan’s Nikkei rose 0.08 per cent, Hong Kong’s Hang Seng gained 0.34 per cent, South Korea’s Kospi was up 0.06 per cent, and Taiwan’s weighted index advanced 0.12 per cent, while Singapore’s Straits Times index traded lower. (ANI)