The S&P BSE Sensex slipped over 350 points, to trade at 85,900, while the NSE Nifty 50 fell over 100 points, to slip 25,950, with early losses reflecting investor unease over global and policy-related headwinds.
On the 30-share Sensex, Mahindra & Mahindra, Trent, NTPC, Bharti Airtel and Power Grid weighed on the index, with each stock falling between 1% and 1.5%.
Small-cap and mid-cap stocks also came under pressure, declining 0.2% and 0.4%, respectively.
Shares of Vodafone Idea climbed 3.2% to a fresh 52-week high after reports said the government is likely to grant the telecom operator an interest-free moratorium of four to five years on adjusted gross revenue dues exceeding Rs 83,000 crore.
Expert views
The general expectation in the market is that India’s underperformance in 2025 is likely to be compensated in 2026 and India’s macros are in fine shape and policy support has been strong, said Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, adding that the fiscal and monetary stimuli imparted to trigger consumption and investment has started yielding results and if the momentum sustains it can give the much needed boost to corporate earnings in FY27.
“A major drag on the market continues to be the elusive US-India trade deal which is impacting India’s exports to the US, widening of trade deficit and continuous depreciation in the rupee,” said Vijayakumar.
On the global market front, a likely scenario is the weakening of the AI trade and recent AI results in the US indicate earnings stress in some AI companies, Vijayakumar said, adding that “If the AI trade weakens, that will be beneficial to India. In brief. the macro construct favours outperformance by India in the EM universe in 2026. But the high market valuations should temper expectations.”
FII/DII Tracker
On the institutional front, Foreign Institutional Investors (FIIs) sold equities worth a little over Rs 1,114 crore on December 12, while Domestic Institutional Investors (DIIs) were net buyers to the tune of Rs 3,869 crore.
Global Markets
Asian equities slid at the open on Monday as investors pulled back from risk ahead of a week packed with central bank meetings and key economic data.
MSCI’s broad Asia-Pacific index excluding Japan fell 1%, with South Korean stocks dropping as much as 2.7%, a sharp reversal in one of the year’s strongest-performing markets.
U.S. equity futures were steadier. S&P 500 e-mini futures rose 0.3%, while the yield on the 10-year U.S. Treasury eased 1.2 basis points to 4.182% as markets braced for a heavy slate of policy decisions and data releases.
Gold extended its rally for a fifth consecutive session, inching closer to a record high of $4,381.21. Spot prices were last up 0.5% at $4,325.51.
Cryptocurrencies rebounded after three days of losses, with bitcoin rising 1.2% to $89,517.01 and ether gaining 1.1% to $3,116.42.
Crude impact
Oil prices edged higher on Monday, paring some of last week’s roughly 4% decline, as worries over possible supply disruptions tied to rising tensions between the U.S. and Venezuela eclipsed persistent concerns about excess supply and the potential impact of a Russia-Ukraine peace agreement.
Brent crude futures gained 25 cents, or 0.4%, to $61.37 a barrel by 0055 GMT, while U.S. West Texas Intermediate rose 23 cents, also 0.4%, to $57.67 a barrel.
Rupee vs Dollar
The Indian rupee weakened to a record low on Monday, briefly touching 90.56 against the U.S. dollar, as a prolonged impasse in U.S.-India trade talks and sustained foreign outflows from domestic equities and bonds kept pressure on the currency. The rupee was last trading at 90.52, down 0.1% on the day.
The dollar index, which measures the greenback against a basket of major currencies, was last lower at 98.32.
(with inputs from agencies)