Market Closing View for 8th Dec by Ponmudi R, CEO, Enrich Money

Indian equities faced a sharp sell-off on Monday as persistent weakness in the rupee against the U.S. dollar, along with uncertainty surrounding the conclusion of the India–U.S. trade deal, weighed heavily on investor sentiment. Caution also prevailed ahead of the upcoming U.S. Federal Reserve meeting, prompting traders to pare risk. In the absence of fresh domestic catalysts, traders opted to lighten positions ahead of major global policy announcements and year-end portfolio adjustments. Selling pressure was broad-based, with realty, defence, PSU banks, metals and FMCG stocks bearing the brunt of the decline. The correction was even more pronounced in the broader markets, where small-cap counters were hammered sharply, reflecting heightened risk aversion. 

Technical Views

Nifty closed on a decisively weak note, with the index slipping into a controlled corrective phase after once again failing to sustain above the 26,150–26,200 resistance band. The index opened near this supply zone, but profit-booking in heavyweight stocks quickly dragged prices lower, leading to an intraday low near 25,892. Intraday recoveries remained shallow, clearly indicating that selling into strength dominated the session, while fresh long participation stayed muted. 

Out of the Nifty 50 pack, only four stocks managed to close in the green Reliance Industries, Wipro, HCL Technologies and Tech Mahindra. The remaining 46 stocks ended the session in the red, with most correcting in the 1–2% range, highlighting the broad-based nature of today’s sell-off rather than stock-specific weakness.
Despite today’s decline, the broader structure remains constructive as long as the 25,850–25,800 support pocket holds. This keeps the move classified as a healthy pullback within the prevailing medium-term uptrend. A sustained recovery above 26,150–26,200 would revive upside momentum towards 26,300–26,350, while a decisive close below 25,800 would signal the start of a deeper corrective phase towards 25,600–25,500, necessitating tighter risk management and more selective positioning.

Option activity reflects clear caution among traders. Heavy Call OI remains concentrated at the 26,200–26,300 strikes, confirming strong overhead supply, while Put OI has cooled off below 26,000, indicating weakening downside defence in the near term. On a cumulative basis, Call writers are carrying more than ₹28 crore of open interest, while Put writers stand at only ₹13.6 crore. Notably, today alone saw over ₹13.4 crore of fresh Call writing, clearly pointing to today fresh short positions being built at higher levels. The OI structure now signals a range-to-weak bias unless 26,200 is reclaimed with strength.

Bank Nifty 

Bank Nifty opened on a weak footing and extended losses towards the 59,000 support zone, where temporary stability emerged. A rebound attempt followed, but the recovery stalled near 59,300, a previous support now acting as immediate resistance. The index has also breached its short-term rising trendline near 59,200–59,350, highlighting a shift in short-term sentiment.

Sustained selling in major banking constituents capped any upside attempt towards 59,600, while the post-RBI rate-cut optimism faded amid tightening global liquidity cues. Technically, repeated rejection near the 20-EMA and the inability to hold above 59,400 reinforce a short-term bearish outlook. Key supports now lie at 59,000 and 58,650, with major resistances placed at 59,800 and 60,000. The bias remains cautious for the next session.

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