After the bulls lightened up the D-Street in the previous session, Indian equities ended the first trading week of the calendar year on a weak note. At the close, Sensex ended lower by 0.9 per cent or 720.6 points at 79,223.11, while Nifty50 index closed with a cut of 0.76 per cent ot 183.9 points at 24,004.75. The drag came on the back of selling in select pockets including IT, pharma and private banking stocks.

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Nevertheless, the broader markets after a positive start ended the day on a negative note, but still outperforming the headline indices.

Prashanth Tapse, Senior VP (Research), Mehta Equities on today's market remarked, "Despite the short recovery in the past two sessions, markets lost the momentum as there is still a lot of pessimism due to slowing growth, higher domestic valuations, foreign fund outflows and uncertainty over US trade policies post Trump's resumption as the country's president."

Hence, markets may see bouts of correction and investors will continue to maintain caution while keeping an eye on global developments, he added.

Top gainers from the Nifty pack included stocks like ONGC, Tata Motors, Titan Company, HUL and SBI Life Insurance, while the laggards from the basket were Wipro, HDFC Bank, Tech Mahindra, Adani Ports and ICICI Bank.

Even though in the first two trading sessions of CY 2025, FII selling has lessened with net sales to the tune of Rs 275.96 crore, there is no confirmed stance that FII will continue to buy on the D-Street.

With dollar index at 109.25 and the U.S. 10-year yield at 4.56% the macro construct is not favourable for sustained FII buying, noted Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services: 

Meanwhile, European markets traded in the red in a holiday-shortened week, with the German DAX index down up to 0.7 per cent.