Indian equity markets staged a notable recovery on Thursday, marking their first positive close after five consecutive sessions of weakness, with both benchmark indices showing renewed strength driven primarily by gains in information technology stocks and resilient domestic institutional investor support. The session reflected a shift in sentiment after days of uncertainty influenced by global cues, foreign institutional investor selling pressure and anticipation surrounding major upcoming corporate developments. As the markets opened with cautious optimism and gradually built momentum throughout the day, the Sensex and Nifty delivered performances that signaled growing confidence among market participants, supported further by strong activity in the primary market where several IPOs, including Meesho’s high-profile issue, attracted substantial investor interest.
The overall trading environment demonstrated a balanced interplay between domestic and global factors. While Asian markets showed mixed trends and US benchmarks continued to register modest gains, India’s indices benefited from sectoral rotation, particularly within IT, financials and select blue-chip counters that helped stabilize broader market sentiment. Despite ongoing foreign investor outflows, domestic investors played a critical role in supporting the market, offsetting the selling pressure and ensuring liquidity remained strong across major segments. The day’s performance suggested that Indian equities, though under pressure, continue to find structural support from corporate fundamentals, vibrant domestic participation and the ongoing appetite for high-growth opportunities in the IPO markets.
Sensex Rebounds with Strong IT Support as Global Markets Display Mixed Performance
The BSE Sensex rose by 158.51 points or 0.19 percent to close at 85,265.32, marking a notable shift from the negative trajectory of the previous week. The Nifty 50 index comfortably held above the psychologically important 26,000 level, reinforcing the underlying market resilience and signaling a potential stabilization phase after several sessions of volatility. The rebound was driven primarily by strength in technology stocks, which led the index higher amid positive sector sentiment and selective buying in defensive and premium quality stocks.
Key contributors to the Sensex rally included Bharat Electronics Limited, Mahindra and Mahindra, State Bank of India, Titan, NTPC, Hindustan Unilever, Tata Motors Passenger Vehicles, Bajaj Finserv, Maruti Suzuki and Adani Ports. These stocks reflected sectoral strength in consumer-facing businesses, industrial manufacturing, power generation, banking and diversified financial services. Their collective upward movement provided the index with consistent support throughout the trading session.
Across Asia, market performance remained mixed. South Korea’s KOSPI index closed lower by 1.15 percent at 3,990, reflecting concerns over valuation and external demand. Japan’s Nikkei, however, posted a strong gain of 1.47 percent to reach 50,596, driven by robust performance in automotive, robotics and technology segments. Hong Kong’s Hang Seng index registered a modest rise of 0.41 percent at 25,867 amid selective buying in financials and Chinese technology companies. These divergent trends provided a varied backdrop for Indian equities, which carved out an independent upward trajectory.
The performance of US markets also helped bolster confidence. On December 3, the Dow Jones Industrial Average closed 0.86 percent higher at 47,882, driven by strong corporate earnings updates and investor optimism around interest rate stabilization. The Nasdaq Composite added 0.17 percent to reach 23,454, while the S&P 500 rose 0.30 percent to 6,850. These gains contributed to improved global investor sentiment and mitigated risk-off behavior in emerging markets, including India.
India’s domestic equity markets have recently been influenced by sustained selling from foreign institutional investors. However, despite this persistent outflow, Thursday’s session reflected the ability of domestic investors—particularly mutual funds and insurance companies—to counterbalance external selling pressure. Their strong participation ensured that market liquidity remained stable and index recovery was possible even in the face of cautious global signals.
The renewed enthusiasm in the secondary market also coincided with heightened activity in the primary market, where high-profile public offerings continued to draw significant subscription levels, adding another layer of positivity to investor sentiment.
Primary Market Momentum Intensifies with Strong IPO Subscriptions as Domestic Investors Offset FII Selling
The trading session gained additional momentum from the notable activity in India’s primary market, particularly Meesho’s much-anticipated IPO, which witnessed extraordinary demand on its opening day. The issue, open from December 3 to 5, was subscribed 2.35 times overall on the first day, indicating strong investor confidence in India’s expanding digital commerce ecosystem. Retail investors showed exceptional enthusiasm, fully subscribing their quota within the first hour of bidding and ending the day with a subscription level of 3.86 times. This overwhelming participation highlighted the robust appetite for new-age technology companies and the growing importance of retail participation in shaping IPO market dynamics.
Alongside Meesho, two other active IPOs—EX Limited and Vidya Wires—also gained significant traction. EX Limited’s issue, priced in the band of ₹118 to ₹124, recorded a subscription of 3.42 times on its opening day and is being closely watched by investors anticipating strong listing potential. Vidya Wires, with a price band of ₹48 to ₹52, registered a healthy subscription of 2.89 times. The expected listing premiums for all three IPOs indicate confidence in their growth prospects and the resilience of India’s broader capital markets even amid volatility in benchmark indices.
The IPO boom is unfolding at a time when foreign institutional investors continue to sell aggressively. On December 3 alone, FIIs sold equities worth ₹3,206.92 crore, adding to the selling pressure that has persisted over the past several months. In the first three days of December, foreign investors offloaded ₹8,020.53 crore worth of Indian equities. In comparison, domestic institutional investors purchased equities worth ₹11,935.28 crore during the same period, demonstrating a strong counterbalance to the exit of foreign funds.
In November, FIIs sold an even larger sum—₹17,500.31 crore—reflecting concerns over global interest rates, geopolitical uncertainty and profit-booking tendencies. However, DIIs played an outsized role in supporting the markets, infusing a remarkable ₹77,083.78 crore during the month. This sizable domestic inflow not only provided stability to the indices but also reinforced the increasing significance of homegrown investors in sustaining market resilience.
This pattern underscores a fundamental transformation within India’s capital markets. Domestic investors—largely influenced by strengthening financial literacy, rising disposable incomes and growing reliance on mutual funds and systematic investment plans—are emerging as a powerful stabilizing force. Their consistent investments help mitigate the volatility caused by foreign fund outflows and create a more balanced market structure.
The strong IPO subscriptions further indicate that investors remain confident in India’s long-term growth trajectory despite short-term market fluctuations. Companies operating across sectors, from technology to engineering and manufacturing, continue to attract strong demand, reflecting optimism about future earnings and expanding economic opportunities. The steady rise in retail participation and the surge in domestic inflows suggest that India’s markets are steadily moving toward a more internally driven investment environment.
