Mumbai: Indian equity markets opened on a muted note on Tuesday as continued foreign fund outflows and thin year end trading volumes kept investors cautious. The benchmark indices showed only modest movement in early trade, reflecting a lack of strong domestic triggers.
Market sentiment remained subdued as foreign institutional investors continued to reduce exposure to Indian equities, a trend seen through much of December. With global investors booking profits and limiting fresh bets before the holiday season, trading activity on Dalal Street was relatively light.
The cautious opening came despite some support from positive cues in global markets, especially strong economic data from the United States, which helped Asian shares stay stable. However, these global signals were not strong enough to trigger a clear rally in Indian stocks.
The information technology sector weighed on the market, with IT shares under pressure due to concerns over changes in US visa policies and their possible impact on future earnings. On the other hand, select stocks from the energy and pharmaceutical sectors recorded mild gains on company specific developments.
The Indian rupee traded in a narrow range, supported by recent steps taken by the Reserve Bank of India to ease pressure in the currency market. The central bank’s dollar rupee swap announcement helped calm concerns over liquidity and forward premiums, though it did not significantly change overall market sentiment.
Analysts said the current market mood reflects a wait and watch approach. Many investors are staying on the sidelines until there is more clarity on foreign fund flows and global economic trends. Thin volumes typical of the last week of the year are also adding to the lack of direction.
Overall, the market is expected to remain range bound in the near term, with investors looking ahead to early 2026 for clearer signals on growth, earnings, and global monetary conditions.