Indian stock markets, including the Sensex and Nifty, closed lower on Friday due to thin year-end trading, foreign outflows, and profit-taking near record highs. While large-cap stocks underperformed, mid- and small-cap segments showed selective strength. Metals and consumer durables attracted buying interest, contrasting with selling pressure in IT, autos, and banking sectors. Analysts noted diminished Santa Claus rally optimism amid a lack of fresh catalysts and continued FII outflows impacting the rupee.