Weekly Indian Stock Post Market Report (8-12 December 2025)

📊 Indian Market Overview

Indian equity markets closed the week marginally lower, ending a volatile five-day trading period marked by profit-booking, cautious global sentiment, and uncertainty surrounding the policy outlook of major central banks. While benchmark indices faced sustained selling pressure from heavyweight stocks, mid- and small-cap segments continued to attract steady buying interest, reflecting selective risk appetite among investors.

Market sentiment remained guarded through most of the week as participants digested mixed global economic signals, central bank actions, and macroeconomic data. However, easing wholesale inflation, a sharp narrowing of India’s trade deficit, and resilient services activity provided a supportive domestic backdrop. A strong rebound in Friday’s session helped benchmarks recover from their intra-week lows, limiting the overall weekly losses after a period of sharp volatility earlier in the week.

Weekly Market Performance: A Mixed Close

For the week ended Friday, 19 December 2025, frontline indices ended lower, while broader markets posted gains:

The divergence between large-cap indices and broader markets underscored a rotation-driven environment, where investors selectively accumulated mid- and small-cap stocks while trimming exposure to index heavyweights.

Day-by-Day Market Movement: Volatility Dominates

Monday: Muted Start Amid Global Uncertainty

Markets opened the week on a cautious note as investors remained on the sidelines ahead of key global developments.

• Sensex: –54.30 pts (-0.06%) at 85,213.36
  
• Nifty 50: –19.65 pts (-0.08%) at 26,027.30
  

Lack of fresh triggers and uncertainty around global central bank actions kept trading range-bound.

Tuesday: Heavy Selling Hits Benchmarks

Selling pressure intensified, particularly in heavyweight stocks, leading to sharp declines.

• Sensex: –533.50 pts (-0.63%) at 84,679.86
  
• Nifty 50: –167.20 pts (-0.64%) at 25,860.10
  

Concerns over global growth, foreign fund outflows, and profit-booking after recent highs weighed heavily on sentiment.

Wednesday: Losses Continue, Momentum Slows

Markets extended their decline, though the pace of selling moderated.

• Sensex: –120.21 pts (-0.14%) at 84,559.65
  
• Nifty 50: –41.55 pts (-0.16%) at 25,818.55
  

Investors adopted a wait-and-watch approach as they assessed macroeconomic signals and central bank commentary.

Thursday: Narrow Range, No Clear Direction

Trading remained subdued, with indices ending marginally lower after oscillating in a tight range.

• Sensex: –77.84 pts (-0.09%) at 84,481.81
  
• Nifty 50: –3 pts (-0.01%) at 25,815.55
  

Caution prevailed ahead of fresh cues from global markets and domestic macro data.

Friday: Strong Rebound Caps Weekly Losses

Markets staged a sharp recovery in the final session of the week.

• Sensex: +447.55 pts (+0.53%) to 84,929.36
  
• Nifty 50: +142.55 pts (+0.55%) to 25,958.00
  

Buying interest returned following supportive global developments and improving domestic fundamentals, helping benchmarks recover a significant portion of weekly losses.

Key Domestic Development: India–Oman CEPA Strengthens Trade Outlook

India and Oman signed a Comprehensive Economic Partnership Agreement (CEPA) in Muscat on 18 December 2025, marking a major milestone in bilateral economic relations.

Key Highlights of the Agreement:

• Elimination of duties on nearly all goods
  
• Coverage of 98.08% of Indian export lines and 77.79% of Omani imports
  
• Implementation scheduled for Q1 2026
  
• Provision for 100% Indian FDI in key Omani service sectors
  
• Significant easing of visa norms for skilled professionals
  

Bilateral trade between India and Oman stood at $10.61 billion in FY 2024-25, and the agreement is expected to substantially enhance trade flows. India has excluded sensitive sectors such as agriculture, dairy, tea, coffee, rubber, tobacco, precious metals, jewellery, and labour-intensive products from the deal.

Domestic Economy: Improving Fundamentals Offer Support

Trade Data Shows Sharp Improvement

India’s trade deficit narrowed sharply to a five-month low of $24.53 billion in November, offering relief after October’s record-high deficit.

• Merchandise exports: $38.13 billion (up from $34.48 billion)
  
• Imports: $62.66 billion (down from $76.06 billion)
• Strong export growth to the United States (+10% MoM)
  
• Decline in gold, oil, and coal imports
  

Services trade remained robust:

• Services exports: $35.86 billion
  
• Services imports: $17.96 billion
  
• Services surplus: $17.9 billion
  

Wholesale Inflation Remains Benign

Wholesale inflation stayed in deflationary territory for November.

• WPI: –0.32% YoY (vs –1.21% in October)
  

Key trends:

• Wholesale food inflation: –2.6%
  
• Vegetable prices: –20.23% (improved from –34.97%)
• Manufactured products: +1.33%
  
• Fuel and power: –2.27%
  

Subdued inflation pressures strengthened expectations of continued policy accommodation.

PMI Data Signals Moderation, Not Weakness

Economic activity continued to expand, albeit at a slower pace.

• HSBC Flash Composite PMI: 58.9 (slowest since February)
  
• Manufacturing PMI: 55.7 (lowest improvement in two years)
  
• Services PMI: 59.1
  
• Manufacturing Output PMI: 58.4
  

Services remained the key growth driver, while manufacturing showed signs of moderation.

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Global Markets: Central Banks and Growth Data in Focus

Europe

• UK inflation: eased sharply to 3.2% in November
  
• ECB: rates unchanged at 3.75%
  
• Norway: held rates at 4%
  
• Sweden: kept rates at 1.75%
  
• Bank of England: cut rates by 25 bps to 3.75%
  

Asia-Pacific

Japan

• Bank of Japan raised rates by 25 bps to 0.75%, highest since 1995
  
• Exports rose 6.1% YoY
  
• Tankan survey showed strong business optimism
  
• Consumer inflation eased to 2.9%
  

China

• Retail sales grew 1.3% YoY
  
• Industrial production rose 4.8% YoY
  

Australia

• Composite PMI eased to 51.1 in December
  

United States

• Job growth: 64,000, above expectations
  
• Unemployment rate: 4.6%, highest since September 2021
  
• Broader unemployment measure rose to 8.7%
  
• Inflation eased to 2.7%, supporting expectations of policy flexibility
  

Key Takeaways for Investors

• Benchmark indices ended the week marginally lower
  
• Mid- and small-cap stocks outperformed
  
• Trade deficit narrowing improved macro stability
  
• Inflation remained subdued
  
• Global central bank actions dominated sentiment
  
• Volatility likely to persist amid policy uncertainty
  

Conclusion

Indian equity markets navigated a volatile week shaped by global cues, profit-booking, and cautious investor positioning. While benchmark indices closed slightly lower, improving domestic macro indicators and resilient broader markets suggest underlying strength. As the year draws to a close, global monetary policy developments, trade trends, and economic data will remain key drivers of market direction.