Markets end flat on Thursday amid caution as IT gains offset broader weakness
CHENNAI: Indian equity markets ended Thursday (December 18) session on a cautious and largely directionless note as investors struggled to find strong triggers to extend gains, while selective buying in information technology stocks helped limit the downside. After oscillating between gains and losses through the day, benchmark indices closed almost flat, reflecting a market that remains wary of global uncertainties and sustained foreign fund outflows.
The BSE Sensex slipped by around 78 points to settle near 84,480, while the NSE Nifty 50 closed virtually unchanged at around 25,815. The narrow movement in the benchmarks masked underlying weakness in the broader market, where declines outnumbered advances, indicating that investor participation remained selective and risk appetite subdued.
The markets on Thursday staged a smart recovery from the day’s lows despite broad weakness across Asian equities, but mild selling pressure emerged at higher levels, prompting cautious traders to pare positions ahead of the release of US consumer price inflation data and the outcome of the Bank of Japan’s crucial monetary policy meeting—both of which are expected to influence global market sentiment and near-term risk appetite, says a senior market analyst.
"Nifty closed with a mild, compressed finish, forming a long-legged Doji, a clear sign of indecision near the 25,800 base. This zone continues to act as the primary demand area; however, repeated testing over recent sessions makes it increasingly fragile," said R Ponmudi, CEO of Enrich Money, a SEBI-registered online trading and wealth tech firm.
Certain key factors weighed on sentiment in domestic equities, preventing any meaningful recovery despite relatively stable domestic macro indicators through the day. Trading was marked by volatility, with early gains giving way to selling pressure as global cues remained mixed. Asian markets traded weak amid concerns over global growth and persistent uncertainty around monetary policy in major economies.
Information technology stocks emerged as a key support for the indices, benefiting from expectations of steady demand in overseas markets and marginal currency support. Gains in large IT names helped offset losses in several other sectors. In contrast, auto, pharma and media stocks remained under pressure, dragged down by valuation concerns and worries over demand visibility. Financial stocks showed mixed trends, with buying in select heavyweight counters offset by selling in others, resulting in limited overall impact on the benchmarks.
Foreign institutional investors continued to remain cautious, with ongoing outflows adding to the pressure on equities. The movement of the rupee and elevated global bond yields also kept investors on edge, reinforcing a wait-and-watch approach. Domestic institutional investors provided some support, but their buying was not strong enough to drive a decisive upward move.
From a technical perspective, the market remained range-bound, with the Nifty struggling to move decisively above recent resistance levels. Analysts noted that the inability to sustain intraday gains suggests lingering caution and a lack of strong conviction among participants. At the same time, key support levels continued to hold, preventing a sharper decline.
"A decisive break below 25,800 could open the door toward 25,650, the next meaningful support pocket. As long as these levels hold, recovery attempts remain possible. On the upside, 25,950 stands out as a strong supply zone due to heavy Call OI, keeping the market in a sell-on-rise mode. Only a sustained breakout above 26,000 would signal a shift in momentum, with scope for 26,200. Momentum remains subdued, with RSI in the 40–45 range, pointing to a range-bound market with a mild bearish bias," says Ponmudi
He added that Bank Nifty ended the session in a range-bound to mildly positive tone, forming an inverted hammer near the 58,900 support area, indicating buying interest on dips. The index held firmly above its key short-term supports, preserving the broader bullish structure. Price action stayed muted with low volatility, reflecting a wait-and-watch approach near higher levels, he said.
"Technically, the consolidation appears constructive, as Bank Nifty continues to trade above the 59,300 breakout zone, maintaining a pattern of higher lows on short-term charts. While immediate resistance in the 59,500–59,800 zone capped upside attempts, the lack of aggressive selling suggests bullish control remains intact, with 58,800–58,700 acting as a strong support range. Dips continue to find support, and a clear breakout above resistance is needed to trigger fresh momentum," Ponmudi said.
Overall, the December 18 session highlighted the prevailing consolidation phase in Indian equities. With global cues remaining uncertain and no major domestic triggers on the horizon, markets are likely to continue witnessing choppy and stock-specific movements in the near term. Investors appear to be increasingly selective, focusing on quality names and defensives, while staying cautious on high-beta segments until greater clarity emerges on global and domestic fronts.
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