The Indian stock market experienced a volatile session today, December 4, 2025, with both the Sensex and Nifty indices exhibiting weakness in pre-open trading. This downturn occurred against the backdrop of the rupee hitting a fresh record low against the U.S. dollar, reaching 90.41.

Market Performance:

The Sensex and Nifty extended their losing streak, marking the fourth consecutive session of decline. The BSE Sensex closed at 85,106.81, down by 31.46 points or 0.04 percent. The NSE Nifty 50 ended at 25,986, falling 46.20 points or 0.18 percent. Broader market indices also reflected this negative sentiment, with the BSE MidCap index ending 0.9% lower and the BSE SmallCap index closing 0.4% down.

Currency Woes:

The Indian rupee's slide to a new record low of 90.41 against the US dollar has been a major cause for concern. This depreciation is attributed to several factors, including persistent equity outflows by foreign investors, uncertainty surrounding the India-US trade deal, and a widening current account deficit. The rupee has depreciated more than 5% against the dollar year-to-date, making it one of Asia's worst-performing currencies.

Sectoral Performance:

The sectoral indices presented a mixed picture. IT stocks showed resilience, with Wipro and Tata Consultancy Services (TCS) emerging as major gainers. The Nifty IT index climbed around 1%. Conversely, PSU bank and auto stocks experienced the sharpest decline. Losses were widespread, with Adani Ports, Larsen & Toubro, Bajaj FinServ, SBI, NTPC, Mahindra & Mahindra, and Titan Company falling.

Factors Influencing the Market:

Several factors have contributed to the current market downturn:

• Weakening Rupee: The record decline in the rupee has been a primary drag on the market. The currency's weakness is attributed to persistent equity outflows and uncertainty surrounding the India–US trade deal.
• Foreign Fund Outflows: Foreign portfolio investors (FPIs) have been net sellers in equities throughout 2025, with significant withdrawals in early December.
• RBI Policy Meeting: Investors are exercising caution ahead of the Reserve Bank of India's (RBI) monetary policy meeting.
• Global Cues: Mixed global cues, including fluctuating oil prices and concerns over a global supply surplus, have added to the market's uncertainty.

Expert Views:

Despite the rupee's depreciation, some experts believe the weakness is temporary. CRISIL's Chief Economist, Dharmakirti Joshi, expects the Indian economy to grow at 7 per cent in fiscal year 2025-26 and anticipates the rupee's appreciation once the India-US Bilateral Trade Agreement is finalized.

Overall Sentiment:

Market sentiment has cooled after the benchmark indices touched record highs earlier in the week. Investors are booking profits and adopting a cautious stance. The market breadth is weak, with losses widespread across various sectors.