Summary of this article
Sensex closed at 84,559.65, down 0.14 per cent, and Nifty 50 settled at 25,818.55, down 41.55 points
Nifty PSU Bank stood out in an otherwise subdued market, ending with a gain of 1.29 per cent
Investors will be tracking Japan's bond yield movement, Rupee's trajectory, Sebi's board meeting outcome, and interest rate outlooks by global central banks
Benchmark indices slipped for the third consecutive session on December 17 amid mixed global cues. Rising Japanese government bond yields aggravated concerns over the already ongoing foreign fund outflows from emerging markets like India, mixed US unemployment data for November stoked recession concerns and increased expectations of a more accommodative US Federal Reserve policy outlook. On the other hand, the Reserve Bank of India's (RBI) intervention lent some support to the rupee.
At close, Sensex was at 84,559.65, down 120.21 points, or 0.14 per cent, and Nifty 50 was at 25,818.55, down 41.55 points, or 0.16 per cent.
Broader market indices showed exaggerated declines, as the Nifty Midcap 100 fell 0.54 per cent, the Nifty Smallcap 100 declined 0.73 per cent, and the Nifty 500 ended lower by 0.31 per cent.
PSU Bank Emerges As Outlier
Nifty PSU Bank emerged as the outlier, despite an overall subdued market, closing higher by 1.29 per cent. Nifty IT and Nifty Metal gained 0.29 per cent and 0.25 per cent, respectively, while Nifty Oil & Gas and Nifty Pharma also ended the day in green.
On the flip side, Nifty indices of realty, consumer durables, financial services, private bank, auto, FMCG, healthcare and media ended the day in the red.
Nifty 50: Top Gainers & Losers
Among the Nifty 50's constituents, Shriram Finance gained 2.07 per cent, State Bank of India (SBI) rose 1.58 per cent, Hindalco Industries advanced 1.30 per cent, and Eicher Motors gained 1.15 per cent, emerging as the top gainers in an otherwise weak market. Tata Consumer Products, Wipro, Coal India, Infosys, Axis Bank, Sun Pharma and Tata Consultancy Services (TCS) also closed in the green.
On the other hand, Max Healthcare, Apollo Hospitals, Trent, Bajaj Auto, HDFC Life Insurance, and SBI Life Insurance closed lower between 1.13 per cent and 3.71 per cent. ICICI Bank, HDFC Bank, Adani Ports, Jio Financial Services, Bajaj Finserv, Adani Enterprises, Nestle India, and Bharat Electronics also settled in the negative territory.
Japan’s Rising Bond Yields Raise Concerns Over FII Flows
Japan’s 10-year government bond yield climbed to an 18-year high on December 17 after reports suggested higher government spending next year, stoking fiscal concerns.
The benchmark yield rose 3 basis points (bps) to 1.98 per cent, its highest level since June 2007. When Japanese government bond yields rise, borrowing in yen becomes more expensive. This reduces the appeal of yen-funded carry trades. Investors typically then tend to cut exposure to higher-yielding emerging markets like India. For India, this can lead to foreign institutional investor (FII) outflows from equities and debt. Market participants will be keeping a track of Japan’s government bond yields.
Mixed US Labour Market Report
The US unemployment rate rose to 4.6 per cent in November 2025 from 4.4 per cent in September, its highest level since September 2021, according to the US Bureau of Labor Statistics published on December 16.
The world’s largest economy lost an estimated 1,05,000 jobs in October; however, it added 64,000 jobs in November. The October report was delayed due to the US government shutdown and marked the first time in nearly eight decades that a monthly labour market snapshot did not include the unemployment rate. It was also the first official reading of the labour market since the shutdown.
US Retail Sales Stay Flat
Separately, the US Census Bureau said retail sales were flat in October, the weakest reading in five months. Retail and food services sales were largely unchanged in November at $732.6 billion, though they were up 3.5 per cent from a year earlier. Sales between August and October rose 4.2 per cent year-on-year (y-o-y).
A flattish consumer demand can hurt earnings visibility for Indian companies with high exposure to the American market. At the same time, cooling demand strengthens expectations of easier US monetary policy. All in all, it is a mixed report for emerging economies like India.
RBI’s Intervention Supports Rupee
The RBI stepped in aggressively to support the rupee by selling dollars in the currency market. The rupee jumped to an intraday high of 89.81 against the US dollar after the intervention, from 90.92 at the close in the previous session. The currency later pared gains and was last seen trading at 90.62, as of 5:03 PM.
Stock Market Outlook
Market participants will keep a close track on rising government bond yields in Japan, as it doesn't bode well for FII flows into Indian equities. Market participants will also be watching the Rupee’s trajectory over the next few sessions after the RBI’s intervention.
Market regulator Securities and Exchange Board of India (Sebi) is conducting a board meeting today, which will likely see discussions on important agendas like total expense ratio norms, securities lending and borrowing mechanism, and measures to ease business for FIIs, among others. Further, the European Central Bank and Bank of England are set to announce their interest rate decisions on December 18, which could have implications for global investor sentiment. The European Union and the United Kingdom are also set to release their consumer price index (CPI)-based inflation print for November.
