The BSE Sensex dropped by 163 points, or 0.2%, to reach 85,247 during Friday morning trading, extending losses from the previous session, mainly weighed down by technology, financial services, and banking stocks. Indian markets experienced a period of consolidation, with lower trading volumes amid a lack of significant global market movements due to holidays in some regions. The positive performance of Wall Street on Wednesday, with the S&P 500 and the Dow reaching record highs, helped mitigate some of the losses. Traders were eagerly anticipating the release of industrial and manufacturing production data for November to gain insight into the Indian economic outlook for the upcoming year. Some of the early losers in the session included Bajaj Finance (-1.1%), Sun Pharmaceuticals (-1.0%), Tata Steel (-0.7%), TCS (-0.5%), and JSW Steel (-0.4%). Despite the current decline, the index remains on track for a 0.3% increase for the week, which would mark the first weekly gain in three weeks.
The Indian rupee rose to around 89.7 per USD, rebounding from a one-week low hit in the previous session, supported by a softer dollar and recent central bank measures that helped stabilize sentiment. The currency has settled into a holding pattern after rebounding from record lows, with the dollar’s slide to a multi-month trough giving the rupee some breathing room, even as traders remain cautious about sustaining gains. Focus has shifted to the forward market after the Reserve Bank of India announced a $10 billion dollar–rupee buy/sell swap, aimed at absorbing excess dollar liquidity in the banking system. The move has already eased pressure on forward premiums, which had surged sharply in recent sessions due to abundant dollar supply and year-end balance sheet constraints. With the swap expected to cool elevated premia, particularly at longer tenors, traders see the RBI’s action as a signal of intent to smooth distortions while keeping spot moves relatively contained.
