Indian shares subdued on thin year-end trade

India’s equity benchmarks slipped on Friday as volumes thinned toward the year-end, with analysts saying that an advance depended on momentum from the quarterly earnings season starting next month.

The Nifty 50 index fell 0.25% to 26,077.85, while the BSE Sensex index shed 0.26% to 85,186.61, as of 9:54 a.m. IST.

Most Asian markets, including India, were closed on Thursday for the Christmas holiday.

Twelve of the 16 major sectors logged losses.

Both the Nifty and Sensex hit record highs in November after 14 months, but have remained subdued so far in December, shedding about 0.3% and 0.5%, respectively.

“We expect Indian equities to trade in a narrow range in the remaining sessions of 2025 due to a lack of triggers and reduced trading activity due to holidays across several global markets,” said Siddhartha Khemka, head of research of wealth management at Motilal Oswal Financial Services.

Financial institutions such as banks and investment firms likely indulged in year-end book squaring, a process to close out or rebalance their positions to tidy up books.

This contributes to muted activity as firms refrain from taking new positions, leading to lower liquidity and volumes. Average daily trading volumes of Nifty 50 stocks in December have been around 250 million shares, compared with about 300 million shares in the previous month.

Among individual stocks, Ola Electric gained 3.5% after the electric vehicle maker received the government approval for a 3.67-billion-rupee (about $41 million) payout under the production-linked incentive (PLI) scheme for automobiles and auto components.

Drug maker Panacea Biotec surged 13.3% after projecting a rise in contract value following an amended award from UNICEF for vaccine supply.

The broader small-caps rose about 0.3%, led by Ola Electric while mid-caps traded flat.