Indian markets witnessed a flat close on Tuesday as volatility and foreign fund outflows kept investors cautious. Markets remained shut on Wednesday for Christmas and are expected to start positively today, supported by global cues. Optimism is fueled by a report suggesting India’s GDP growth, which dropped to 5.4% in Q2, is rebounding in Q3, per high-frequency indicators from the RBI's State of the Economy report.

Additionally, traders may find encouragement from news that the government aims to improve spending quality, enhance social security, and reduce the fiscal deficit to 4.5% of GDP by FY26. However, concerns linger due to foreign institutional investors selling shares worth ₹2,454 crore in the previous session and a significant slowdown in net foreign direct investment to $2.1 billion during April-October 2024 from $7.7 billion a year earlier.

Sectoral updates include metal stocks, with the steel ministry urging the Finance Ministry to double the Customs duty on imported finished steel to 15% in the Union Budget 2025–26. The insurance sector also faces scrutiny as penetration dropped to 2.8% in FY24 from 3.7% in the prior year. Cement stocks may draw attention as the industry eyes an 8% sales growth in 2025, driven by government spending on infrastructure.

Globally, US markets closed higher in a thin Christmas Eve trade, continuing a global rally, while Asian markets traded mixed on Thursday. Back in India, Tuesday’s session ended slightly lower due to profit booking and FII outflows, with the BSE Sensex down 67.30 points at 78,472.87 and the CNX Nifty falling 25.80 points to 23,727.65.