Sensex Plunges Again! Is Monday December 29th Set for More Pain? Investors Brace for Holiday Correction

ECONOMY
Whalesbook Logo
AuthorAarav Shah|Published at:
Sensex Plunges Again! Is Monday December 29th Set for More Pain? Investors Brace for Holiday Correction
Overview

Indian stock markets saw another day of losses as the BSE Sensex fell 367 points and the NSE Nifty declined 99.80 points. This marks the third consecutive session of decline for the Sensex, driven by weak market momentum, ongoing foreign fund outflows, and a lack of significant domestic catalysts. Profit-taking dominated the holiday-shortened trading week, with analysts predicting further correction ahead as key support levels are tested.

Sensex Prediction for Monday, December 29: Profit-Taking Dominates Holiday Week Amidst Foreign Fund Outflows

The Indian equity markets concluded Friday, December 26, 2025, on a negative note, with the benchmark BSE Sensex experiencing a significant drop of 367 points. This downturn extended the index's losing streak to three consecutive trading sessions, dampening hopes for a traditional year-end rally. The market's weakness was attributed to subdued momentum, ongoing outflows from foreign institutional investors, and a general absence of substantial domestic catalysts to spur buying interest.

The Core Issue

The market's performance was significantly influenced by persistent foreign fund outflows, indicating a cautious stance from international investors regarding Indian equities. Coupled with this, the lack of fresh domestic triggers left the market susceptible to profit-taking activities, especially prevalent during a holiday-affected trading period. This combination led to a cautious sentiment across most sectors, with trading volumes remaining thin.

Market Reaction

The 30-share BSE Sensex closed lower by 367 points, or 0.43 percent, at 85,041.45, after hitting an intraday low of 84,937.82. The 50-share NSE Nifty also declined, falling 99.80 points, or 0.38 percent, to settle at 26,042.30. Among the Sensex constituents, Bajaj Finance, Asian Paints, HCL Technologies, Tata Consultancy Services, and Sun Pharma were among the prominent laggards. However, Titan, NTPC, Axis Bank, UltraTech Cement, Reliance Industries, and Hindustan Unilever provided some support by closing in positive territory.

Analyst Commentary

Aakash Shah, Research Analyst at Choice Equity Broking Private Limited, described the Sensex's movement as "choppy price action." He noted that the index struggled to sustain intraday gains and faced repeated rejections near previous resistance zones. This pattern suggests continued profit-taking and a lack of strong directional conviction in the current market environment. Selling pressure was observed across key sectors like Information Technology and Automobiles.

Technical Outlook

From a technical perspective, Shah highlighted immediate resistance for the Sensex around the 85,500–85,600 levels. Key support is now placed near 84,500–84,600, with a stronger base identified between 84,300–84,200. A decisive breach below this support zone could invite further corrective pressure, while a recovery above 85,600 might help stabilize the trend.

Sectoral Performance and Weekly Trend

Sectoral indices indicated a cautious trading day. The BSE Focused IT and IT sectors saw declines, along with telecommunication, capital goods, and auto segments. Conversely, the BSE commodities and metal indices registered gains. Despite the recent losses, the overall performance for the holiday-shortened week remained slightly positive, with the Sensex and Nifty recording modest gains.

Impact

The prevailing negative sentiment and foreign fund outflows pose a risk of further declines in the Indian stock market. Investors are advised to monitor key support levels and global cues closely. Any sustained breach of support could lead to increased volatility.
Impact Rating: 6/10

Difficult Terms Explained

  • Profit-taking: Selling stocks after a rise in price to secure realized gains.
  • Foreign fund outflows: The withdrawal of investment capital by foreign investors from a particular market.
  • Domestic triggers: Internal economic or policy-related events that can influence a country's stock market.
  • Technical perspective: An approach to market analysis based on historical price and volume data.
  • Resistance: A price level where selling pressure is expected to overcome buying pressure, potentially halting an upward price movement.
  • Support: A price level where buying interest is expected to overcome selling pressure, potentially halting a downward price movement.
  • Choppy price action: Erratic and unpredictable price movements in the market.
  • Holiday-thin market: Trading activity characterized by low volumes due to a public holiday period.
Disclaimer:This content is for educational and informational purposes only and does not constitute investment, financial, or trading advice, nor a recommendation to buy or sell any securities. Readers should consult a SEBI-registered advisor before making investment decisions, as markets involve risk and past performance does not guarantee future results. The publisher and authors accept no liability for any losses. Some content may be AI-generated and may contain errors; accuracy and completeness are not guaranteed. Views expressed do not reflect the publication’s editorial stance.