Market sentiment remained guarded as geopolitical tensions escalated following US military action in Venezuela over the weekend.
Markets surrendered early gains to close lower on Monday, with benchmark indices witnessing sharp profit booking after touching fresh all-time highs amid geopolitical concerns and weakness in heavyweight IT stocks. The Sensex declined 322.39 points, or 0.38 per cent, to close at 85,439.62, while the Nifty slipped 78.25 points, or 0.30 per cent, to settle at 26,250.30.
The Nifty 50 opened strong at 26,333.70 and scaled a fresh all-time high of 26,373 during early trade but failed to sustain elevated levels as selling pressure intensified through the session, dragging the index to an intraday low of 26,210. The Sensex opened at 85,640.05 against its previous close of 85,762.01.
“Indian equity markets touched fresh all-time highs but witnessed selling pressure from higher levels as investors turned cautious,” said Ashika Institutional Equities in its market commentary. “The benchmark Nifty index scaled a new lifetime high of 26,373 during the session; however, profit-taking emerged near the top, dragging the index lower to test the crucial 26,200 support zone by the close.”
IT stocks emerged as the biggest laggards, with Infosys declining 2.03 per cent to close at ₹1,607.10, HCL Technologies falling 1.85 per cent to ₹1,609.80, and Wipro dropping 1.71 per cent to ₹264.40. The IT index shed over 1.5 per cent, becoming the worst-performing sectoral index. HDFC Bank also weighed on sentiment, declining 1.87 per cent to ₹982.90, while ONGC fell 1.62 per cent to ₹237.56.
“Losses were led by IT heavyweights such as HCL Technologies, Infosys and Wipro, following cautionary brokerage commentary and concerns over potential US tariff actions,” noted Gaurav Garg, Research Analyst at Lemonn Markets Desk.
Market sentiment remained guarded as geopolitical tensions escalated following US military action in Venezuela over the weekend. “President Donald Trump’s renewed remarks on potential tariff hikes against Indian imports linked to India’s continued purchases of Russian oil added a layer of geopolitical caution to global markets, keeping risk appetite in check during today’s session,” said Ponmudi R, CEO of Enrich Money.
On the positive side, defence and realty stocks outperformed. Bharat Electronics surged 3.03 per cent to ₹415.35, emerging as the top gainer on the Nifty. Nestle India jumped 2.66 per cent to ₹1,313.80, while Eicher Motors gained 1.89 per cent to ₹7,473. Maruti Suzuki advanced 1.76 per cent to ₹17,259, and Axis Bank rose 1.63 per cent to ₹1,287.60. The Nifty Realty index surged 2.1 per cent on strong business updates from multiple realty companies, while Consumer Durables gained 1.1 per cent.
Broader market performance was mixed. The Nifty Midcap 100 declined 0.16 per cent to 61,265.70, while the Nifty Smallcap 100 outperformed, gaining 0.53 per cent to close at 17,926.40. The Nifty Bank slipped 0.18 per cent to 60,044.20 after touching a fresh all-time high of 60,437 in early trade. “Bank Nifty continued to hover near its all-time high territory, but the session highlighted visible supply pressure at elevated levels,” observed Ponmudi R.
Market breadth tilted towards declines, with 2,545 stocks falling against 1,723 advancing on the BSE, while 203 remained unchanged. A total of 209 stocks hit 52-week highs, while 144 touched 52-week lows.
The Indian rupee weakened further, losing ground in nine out of the past ten trading sessions. “This weakness is primarily fueled by ambiguity surrounding bilateral trade agreements between Washington and New Delhi, alongside a sluggish domestic stock market triggered by an exodus of foreign capital,” said Dilip Parmar, Research Analyst at HDFC Securities. “In the coming days, the USDINR spot pair faces resistance near the 90.45 threshold, while downward movement is expected to find support around the 89.90 mark.”
Gold continued its strong momentum, with MCX gold surging ₹2,000 to trade near ₹1,37,900, while Comex gold rallied nearly $100 to around $4,435. “The momentum in bullion remains strong as a data-heavy week in the US lies ahead, with ADP employment, Non-Farm Payrolls, unemployment rate, and initial jobless claims expected to inject heightened volatility into prices,” said Jateen Trivedi, VP Research Analyst at LKP Securities.
Volatility picked up during the session, with India VIX rising 6.06 per cent to 10.02. “We expect markets to remain firm with a positive bias, supported by better-than-expected Q3 business updates and expectations of a capex pickup ahead of the Union Budget, though there could be some volatility on the back of global geopolitical developments,” said Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services.
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Published on January 5, 2026
