Indian markets: Ahead of the Christmas holiday, early trading on Wednesday saw the domestic stock markets begin flat to slightly lower as ongoing Foreign Portfolio Investor (FPI) selling limited optimistic mood despite encouraging local fundamentals.

Shortly after opening, the Nifty 50 index was down 12.85 points, or 0.05 percent, at 26,154.20. In the meanwhile, early trading saw the BSE Sensex drop 93.51 points, or 0.11 percent, to 85,431.33.

Profit booking and foreign fund withdrawals are constraining gains during the holiday-shortened trading week, according to market observers, even if wider signs are still encouraging.

“At the time of writing, Indian markets are pointing to another bullish start,” Ajay Bagga, a Banking and Market Expert, told ANI. “However, this week has seen two days of FPI selling, and markets have failed to break through important resistance levels. We anticipate some selling into the holiday-shortened trading week as Indian markets hit overbought levels based on PCR readings.

Following the Reserve Bank of India’s announcement of open market operations (OMOs) to infuse Rs 2 lakh crore and a USD 10 billion dollar-rupee exchange, Bagga said, liquidity circumstances should improve. He pointed out that the Indian rupee is still the worst-performing Asian currency in 2025, and these actions should help sustain liquidity and provide some respite.

The rupee lost five paise versus the US dollar on Tuesday despite the US dollar index’s decline, with the DXY at 97.7. A recovery in FPI inflows is nonetheless hampered by currency weakness.

Foreign institutional investors (FIIs) sold stocks worth Rs 1,794.80 crore on Tuesday, while domestic institutional investors (DIIs) bought stocks worth Rs 3,812.37 crore.

According to Ponmudi R, CEO of Enrich Money, the Nifty is now going through a period of consolidation. As is common after a significant upswing, the present price movement of the Nifty 50 indicates a consolidation or breather period right below resistance. He said, “The 26,000-25,950 zone forms a strong demand base, while immediate support is placed at 26,100, backed by notable put open interest.” He went on to say that the short-term picture is still somewhat favorable as long as the index closes over 26,000.

US economic statistics continued to show strength in international markets, with Q3 GDP growth reaching a two-year high of 4.3%. While exports had a robust gain of 8.8%, consumer spending increased by 3.5%.

US markets closed higher, with the Dow and Nasdaq extending their advance for a fourth consecutive day and the S&P 500 finishing at a new high thanks to increased government defense spending and capital expenditures connected to AI.

With the exception of a little drop in the Australian index brought on by worries over possible rate increases by the RBA in 2026, Asian markets were mostly up on Wednesday morning.

The Nikkei in Japan increased by 0.08%, the Hang Seng in Hong Kong increased by 0.34%, the Kospi in South Korea increased by 0.06%, Taiwan’s weighted index increased by 0.12%, and Singapore’s Straits Times index decreased.