Indian stock markets started the new week on a shaky note on Monday, 8 December 2025, as investors turned cautious ahead of a crucial US Federal Reserve policy meeting, even as the rupee hovered near record lows and aviation major IndiGo extended a sharp slump.
By early afternoon, the BSE Sensex had fallen between 600–700 points to around 85,000, while the NSE Nifty 50 dropped below the psychologically important 26,000 mark, with broader midcap and small-cap indices down nearly 2–2.5%. [1]
At various points in the session, the fall was broad-based, led by realty, PSU banks and mid- and small-cap stocks, while IT stocks and select heavyweights like Reliance Industries helped cushion some of the damage. [2]
Below is a detailed explainer of how the market moved through the day and the five main factors that pulled Sensex and Nifty lower.
Key Highlights: Sensex & Nifty on 8 December 2025
- Weak start: On Monday morning, Sensex opened about 300 points lower near 85,396, and Nifty slipped below 26,100 in the first trades. [3]
- Intraday damage: By early afternoon, Sensex was down roughly 660–730 points near 84,982–85,000, and Nifty had fallen about 230–250 points to around 25,935–25,938. [4]
- Mid & small caps bleed: Nifty Midcap and Smallcap indices fell about 2–2.6%, sharply underperforming the benchmarks. [5]
- Sector pain:Nifty Realty and Nifty PSU Bank dropped around 3–3.8%, driven by selling in names like DLF, Prestige, PNB and Canara Bank. [6]
- IndiGo meltdown: InterGlobe Aviation (IndiGo) slumped up to 7–8% intraday, extending last week’s fall to about 16%, wiping out roughly $4 billion in market value. [7]
- Rupee at record low: The rupee weakened to around 90.11 per US dollar, after briefly opening near 90.07, pressured by high crude prices and persistent foreign fund outflows. [8]
- Volatility spikes: The India VIX volatility index inched higher (around 2–6% intraday), signalling rising nervousness on Dalal Street. [9]
How the Market Traded Through the Day
Soft open, quick slide
Coming off a strong RBI policy rally on Friday—when Sensex had closed at 85,712.37 and Nifty at 26,186.45 after a rate cut–fuelled surge—markets opened weak on Monday. [10]
- Around the opening bell (9:15–9:20 am),
- Sensex dropped about 300–320 points to near 85,395–85,625,
- Nifty 50 slipped around 0.3–0.4% to the 26,080–26,160 zone. [11]
Early weakness was driven by services and realty stocks, plus continued FII selling, even as IT names like TCS, Infosys and Tech Mahindra traded in the green. [12]
Mid-morning: Nifty hovers just above 26,000
By late morning (around 11 am), selling intensified:
- Sensex was down roughly 340 points at about 85,366,
- Nifty dropped around 124 points to near 26,063,
- Midcap and small-cap indices were off up to 1.5%. [13]
Market breadth turned decisively negative, with more stocks declining than advancing, particularly in PSU banks, auto and real estate.
Early afternoon: Nifty slips below 26,000, Sensex off over 700 points
The sharpest slide came around midday to early afternoon:
- At about 1:00–1:45 pm,
- Sensex fell to roughly 84,982, down over 700 points (≈0.85%),
- Nifty 50 dropped to around 25,935–25,938, down about 0.95%. [14]
During this phase:
- Nifty Midcap fell nearly 1.9–2%,
- Nifty Smallcap dropped around 2.5–2.6%,
- Nifty Realty slid about 3.5–3.8%,
- Nifty PSU Bank was lower by around 2.5–2.6%. [15]
Some late-session buying in select IT and banking stocks helped indices trim a portion of the losses, but the overall tone stayed risk-off for most of the day. [16]
5 Big Reasons Why Sensex & Nifty Fell on 8 December 2025
1. Global caution ahead of a highly anticipated US Fed rate cut
The US Federal Reserve’s December policy meeting (9–10 December) is one of the most closely watched events of the year.
- Futures markets are pricing an ≈80–86% probability of a 25-basis-point cut from the current 3.75–4.0% range, but there is deep internal disagreement among Fed officials, making this one of the most contentious meetings since 2019. [17]
- Asian markets were mixed to slightly lower, with indices in Japan and South Korea down around 0.3%, and the broader Asia ex-Japan gauge modestly in the red as investors stayed defensive. [18]
For Indian traders, this meant:
- Little appetite to add fresh risk after last week’s RBI rally.
- Rising worry that the Fed could cut rates but sound hawkish, keeping global yields higher for longer.
- Concern that a surprise “no cut” outcome would trigger a bigger risk-off wave.
In short, global macro uncertainty set the stage for profit-booking at higher levels.
2. Relentless FII selling and profit-booking after record highs
Domestic benchmarks are still not far from their recent record peaks, and valuations in many pockets—especially mid- and small-caps—had become stretched.
- Data from recent sessions show Foreign Institutional Investors (FIIs) have been net sellers for multiple days, offloading about ₹438–440 crore worth of equities on Friday alone, even as Domestic Institutional Investors (DIIs) bought over ₹4,100 crore. [19]
- Cumulatively, FIIs have pulled out over ₹10,000 crore from Indian equities so far in December, according to exchange data quoted in market commentary. [20]
With foreign money steadily exiting and indices near all-time highs, any negative cue—global or local—was enough to trigger heavy profit-booking, particularly in midcaps, smallcaps, PSU banks and high-beta sectors. [21]
3. Rupee at record lows and crude near two-week highs
Currency and commodity markets added to the pressure.
- The rupee opened around 90.06 per US dollar and weakened to about 90.11, losing roughly 16 paise versus the previous close. [22]
- Over the past month, the rupee has depreciated around 1.7–1.8%, hovering at or near record lows against the dollar. [23]
- Meanwhile, Brent crude traded near $63.8 a barrel and US WTI around $60.1, close to two-week highs as traders bet that a Fed cut could support US growth and oil demand. [24]
A weaker rupee and firmer crude are a double whammy for India:
- They raise import costs, risking pressure on inflation and the current account.
- They tend to deter foreign investors, who see currency losses eating into returns.
- They make markets nervous that the RBI may not cut as aggressively going forward if currency volatility worsens.
The RBI’s recent 25 bps repo rate cut to 5.25%, taking total cuts in 2025 to 125 bps, has already created a “goldilocks” backdrop of strong growth and ultra-low inflation—but it has also contributed to rupee weakness and encouraged carry-trade unwinds, according to policymakers and analysts. [25]
4. IndiGo’s operational crisis dragged aviation and sentiment
One of the day’s biggest stories—and a key talking point for traders—was the ongoing crisis at IndiGo.
- Shares of InterGlobe Aviation (IndiGo)slumped as much as 8% intraday, extending last week’s decline to around 16% and erasing roughly $4 billion in market capitalisation. [26]
- The sell-off followed a show-cause notice from aviation regulator DGCA over thousands of flight cancellations linked to poor planning for stricter pilot rest rules during the December peak travel season. Thousands of passengers have been stranded across key hubs like Bengaluru and Mumbai, forcing the government to step in and cap fares. [27]
- Domestic media reports highlighted that IndiGo remained the biggest loser on the Nifty 50, falling around 5–7% in early trade and adding further weight to the index. [28]
While aviation is only one sector, IndiGo’s issues mattered because:
- It is India’s largest airline with ~65% market share, so any sustained disruption has macro and sentiment implications. [29]
- The scale of cancellations and regulatory scrutiny spooked investors about execution risks even in otherwise well-regarded blue chips.
- It reinforced a broader “risk-off” mood, encouraging traders to cut positions in other high-beta stocks as well.
Interestingly, rival SpiceJet rallied sharply—gaining nearly 14% as investors bet on market share gains—underlining how stock-specific news can create winner–loser dynamics within a sector. [30]
5. Mid- and small-cap meltdown, higher India VIX and stretched valuations
The real pain on Monday came outside the frontline indices.
- Nifty Midcap 50/100 and Nifty Smallcap indices dropped between 1.9–2.6%, significantly more than the Sensex and Nifty. [31]
- Nifty Realty tumbled about 3.5–3.8%, despite the RBI’s rate cut—a sign that investors were using the rally in rate-sensitive names to book profits. [32]
- Nifty PSU Bank slid around 2.6%, with stocks like PNB, Canara Bank, Bank of India, Union Bank and Indian Bank among the major losers. [33]
- The India VIX volatility index moved higher—up around 2–6% intraday—signalling rising demand for downside protection and a shift into a more cautious trading environment. [34]
Analysts quoted in multiple outlets pointed out that mid- and small-cap segments had run up much faster than large caps over recent months, making them vulnerable to even a small deterioration in liquidity or sentiment. [35]
Put simply: Monday’s fall was as much about valuations and positioning as it was about fresh bad news.
Sector Check: Who Lost and Who Held Up
Heavy selling in financials, realty and broader cyclicals
- PSU banks: Under heavy pressure; Nifty PSU Bank index fell around 2.5–2.6%, with PSU lenders down 2–4%. [36]
- Real estate: One of the worst-hit pockets; DLF, Prestige Estates, Godrej Properties and Anant Raj dropped up to 4% as profit-booking kicked in after a big rally. [37]
- Auto & FMCG: Select auto names like Maruti Suzuki and consumption stocks saw mild to moderate declines as traders booked gains post-RBI-led optimism on rate-sensitive plays. [38]
IT and a handful of large caps offered support
Despite the overall weakness, some IT and large-cap names helped limit downside:
- Tech Mahindra, Infosys, TCS and HCL Tech traded in the green for much of the session, emerging as top gainers on the Sensex and Nifty, as investors rotated into export-focused, relatively defensive IT stocks. [39]
- Reliance Industries also drew buying interest at times, providing a stabilising influence on the indices. [40]
This sectoral divergence underlines an important theme: investors are not abandoning equities outright, but are becoming far more selective, favouring cash-rich, globally diversified large caps over richly valued domestic cyclicals.
Macro Backdrop: RBI’s Rate Cut vs Rupee Slide
Friday’s rally was driven by the RBI’s Monetary Policy Committee cutting the repo rate by 25 basis points to 5.25%, bringing cumulative rate cuts in 2025 to 125 bps—the most aggressive easing since 2019. [41]
The central bank:
- Raised its GDP growth forecast to 7.3% for FY26,
- Cut its inflation projection to around 2%,
- Announced additional liquidity support through OMOs and FX swaps. [42]
This has created a rare “goldilocks” mix of strong growth and ultra-low inflation, but at the cost of:
- A sharply weaker rupee,
- Concerns about external balances amid higher US tariffs and a wider trade deficit,
- Increased sensitivity of markets to global rate and currency moves. [43]
Monday’s session was effectively the market saying: “Yes, RBI is supportive—but global risks and currency pressure cannot be ignored.”
What Should Investors Watch Next?
This section is for information and education, not a recommendation to buy or sell any securities.
Over the next few days, markets are likely to be driven by three big forces:
- US Fed decision (9–10 December 2025)
- A 25 bps cut with dovish commentary could stabilise global risk sentiment and support emerging markets.
- A cut accompanied by hawkish guidance or a surprise pause could trigger fresh volatility in equities, bonds and currencies. [44]
- Rupee trajectory and FII flows
- Sustained trading above 90 per dollar may keep FIIs on the sidelines or prompt further outflows, especially if global yields stay firm. [45]
- Any signs of RBI intervention to smooth volatility or stabilising global risk appetite could ease pressure.
- Resolution of IndiGo’s crisis and aviation regulation
- Clarity from the DGCA’s show-cause process and visible improvement in IndiGo’s operations will be important for both the stock and overall risk sentiment in domestic cyclicals. [46]
In the background, investors will also track:
- The heavy IPO calendar, including large offerings like ICICI Prudential AMC, which can temporarily drain liquidity from secondary markets. [47]
- Fresh macro data on inflation and growth, which will shape expectations for further RBI moves.
Practical Takeaways for Retail Investors
Again, this is not investment advice, but a summary of how many professionals are framing the day:
- Avoid panic-selling: One weak session after a sharp rally is common when markets are near record highs and facing big global events.
- Focus on asset allocation: Ensure your mix of equities, debt and cash matches your risk tolerance and time horizon, rather than reacting solely to daily index moves.
- Quality over momentum: Periods of higher volatility tend to reward strong balance sheets, consistent earnings and reasonable valuations over speculative high-fliers.
- Use corrections selectively: Technical analysts note that Nifty has key support in the 25,900–25,700 zone; many recommend a “buy on dips” approach only if the index holds above major support levels. [48]
If you’re unsure how to interpret days like this, consider speaking with a SEBI-registered investment adviser rather than reacting impulsively to headlines.
Quick FAQ: Stock Market Today (8 December 2025)
Q1. Why did the Indian stock market fall today?
Because of a combination of global and local factors: caution ahead of the US Fed meeting, relentless FII selling, a weaker rupee and higher crude prices, profit-booking in mid- and small-cap stocks, and stock-specific stress from IndiGo’s operational crisis. [49]
Q2. Did the Nifty fall below 26,000?
Yes. At one point in early afternoon trade, Nifty 50 slipped to around 25,935–25,938, down nearly 1%, before recovering slightly. [50]
Q3. How badly did mid- and small-cap stocks get hit?
Quite sharply. Nifty Midcap and Smallcap indices fell about 2–2.6%, outpacing the decline in Sensex and Nifty, as stretched valuations met rising volatility and liquidity concerns. [51]
Q4. Why is IndiGo’s share price falling so much?
IndiGo is grappling with an operational meltdown—thousands of flight cancellations linked to new pilot-rest rules—leading to a regulatory show-cause notice and government intervention. Its stock has slumped around 16% in a few days, with an additional 7–8% fall on Monday alone. [52]
References
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