Submitted by admin on December 11th, 2025
The past month has begun with an increase in volatility on both global and domestic markets due to expectations of monetary policy, changes in the exchange rate, sector rotation, and institutional apprehension. Although the major indices have not moved into a full correction range, the trading decisions and trends that have characterized the market have been influenced by consistent selling pressure and risk-off moods that have created unpredictable intraday moves, surge in the number of derivatives, and a sudden gap between the movement of the benchmark and the overall performance of the market.
The sentiment of December is also very contingent on central bank policies expectations. Traders are not keen to make aggressive long positions especially with rate guidance yet to be reviewed. The equity markets across the globe are still registering alternating green and red sittings, which is a sign of not being convinced. The prices of bonds are high and the strength of the currencies is putting strain on the inflows of the emerging markets.
Shift in preference in the portfolio has been another significant force. There is a reshuffling of high-beta investments with traders moving to the defensive side of the business including FMCG, insurance, core banking, and utilities. Growing trends such as technology and luxury consumption have fallen out of favor as traders reduce the exposure in hot segments.
At the start of December, there was a steep decline in benchmark indices. It was not a panic-driven fall but a systematic fall and the institutional adjustment as opposed to retail aggression. Intermediate levels of support were also violated in the benchmark index leading traders to cut leverage in the positional trades.
Institutional investors within the country tried to stabilise the declines but on selective basis, providing only quality large-cap counters. This enabled headline indices to escape steeper declines, despite the fact that there was greater selling pressure in mid-cap and small-cap sectors. The breadth of the market has collapsed and decreasing stocks are more than the gainers.
Based on short-term charts, the prevailing trend is the consolidation up to December unless there would be a significant inflow of liquidity. Traders are playing it small to keep stop-losses and size positions particularly leveraged derivatives trades.
The difference between benchmarks and the wider indices has been one of the most noticeable trading changes in December. The small-cap and the mid-cap universe have demonstrated faster falls than the big-cap counterparts. In part, this is because profit-booking followed months of ongoing rallies and in part it is because of valuation concerns.
Traders that got into mid-caps at a higher value are getting the positions unwound, especially in speculative counters that do not have sustainability of earnings. The quality-oriented purchasing has been unaffected but the momentum-only names have gone through the volume shrinkage as well as the sharp repricing. This implies that the consolidation process in December is not consistent but valuation based.
The market activity in December has generated clarity in sector-wise. Themes that have been under the greatest pressure have been cyclical and export-linked and defensives have been doing relatively well.
Underperforming segments:
Autos and selective PSU counters were obvious not because fundamentals were declining but because traders when gains are locked in after prolonged surges it becomes evident. The data in December suggests that the strengths in the sector are rotating as opposed to collapsing.
From the technical perspective, trading.
Trading pattern-wise, markets are still showing a channel-bound trend with volatility ranges marking the points of entry and exit. Index charts demonstrate recurring efforts in regaining resistance without following through, indicating that rallies are still temporary.
Both the broader and benchmark index momentum oscillators indicate neutral values, not too deep oversold at the same time overbought. This confirms the fact that December is moving sideways on negative bias, and not getting into a complete corrective cycle.
The volume of intraday is concentrated in two trading windows:
Hedging accumulation, as opposed to directional belief is also confirmed by derivatives data. Put-writing is constrained and call-writing is managed indicating that the expectations of traders are towards consolidation.
It has been wary of foreign portfolio activity. The net flow of the December flows has been to net selling, and selectively to the heavy-weight market. Domestic purchasing is still serving as counterbalancing support especially in the banking sphere and index heavy FMCG.
The past two weeks have seen an increase in risk aversion of retail traders. Data indicates:
The reduced involvement in small-cap intraday trades has caused the reduction of volatility spikes, but it has also reduced trading liquidity.
The trends of commodities in December have led to equity fluctuations. The collapse of metal-linked counters was due to the reduction of the sentiment on input cost estimates and export slowdown. Conversely, the stability of price of energy assisted the power and the utility firms to achieve stable demand among the traders.
The movement of currencies was also a contributing factor. As the currency strengthened against the economies that are considered to be safe, the short-term selling pressure was initiated on the export-oriented enterprises like IT services. The trading desks expect further volatility of such counters until there is a sense of sanity on currency direction.
December markets are geared towards the conservative liquidity sensitive trend. Directional moves will probably rely on large moves, which will depend on:
In case institutional flows become supportive, December can end with a modest recovery of the present levels of pressure. The sustained strength though, cannot be accumulated individually but through a wide-based purchase.
To traders, the most logical course until December is still disciplined:
December is forming a consolidation passage that has discernible supports. Unless volatility is softened by macro influences, the market will trade within a managed range, with intraday tactical trading being superior to positional bets.
Trading in December is therefore an indication of re-calibrated expectations, sector repositioning, institutional lethargy and maturing retail discipline. Volatility is not eliminated, but structural bias is positive, putting markets in the right direction at the beginning of the new year by creating healthier trend setups.
Int Rates : 10.5% - 22%
Loan Amount: ₹ 1,00,000.00
Maximum Tenure - 7 Years
Lowest EMI : ₹ 1,686
Interest Rate 13.99% - 24.99%
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Maximum Tenure – 5 Years
Lowest EMI : ₹ 2,326
Interest Rate 9% - 13%
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Maximum Tenure – 20 Years
Lowest EMI : ₹ 1,014
Interest Rate 8.40% - 12%
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Maximum Tenure – 35 Years
Lowest EMI – ₹ 739
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