Indian stocks fell on Tuesday, amid widespread selling as investors prepared for the Federal Reserve’s monetary policy meeting for clues on its rate cut path next year.
The NSE Nifty 50 fell 1.35% to 24,336 points at 3:30 pm IST, while the BSE Sensex fell 1.3% to 80,684.45.
All sectoral indices, except media, fell. Small and mid-cap companies, more focused on the domestic market, fell 0.7% and 0.8%, respectively.
The Indian rupee weakened to its lowest level.
Two analysts said foreign investors were likely selling stocks after data showed India’s trade deficit widened to a record level in November.
While a quarter-point rate cut is expected and already priced in at the end of the Fed’s two-day meeting on Wednesday, markets are bracing for the central bank to reduce its easing in 2025 in anticipation of a higher inflation under the Donald Trump administration.
Indian market sentiment was bogged down by selling pressure as foreign investors awaited cues on further monetary policy easing by the Fed on Wednesday, said Sunny Agrawal, head of equity fundamental research at SBICaps Securities.
Indian equity benchmarks fall as concerns over Fed rate path hit IT stocks
Financials, the heaviest sector in the Nifty 50, fell 1.44%, dragged down by a 1.7% decline in HDFC Bank after the private lender received a regulatory warning alleging non-compliance with disclosure provisions.
Reliance Industries, another Nifty heavyweight, fell 1.8%, dragging the energy index 1.6% lower.
IT companies, which derive most of their revenue from the United States, fell 0.5%.
Foreign investors net sold Indian stocks worth Rs 2,790 crore ($32.87 million) on Monday. Tuesday’s data is expected later in the day.
Monetary easing in the United States typically helps emerging market assets such as Indian stocks as they boost foreign capital inflows.
Among individual stocks, Zomato ended around 1% higher after brokerage Nuvama said it expects the food delivery platform to receive inflows of nearly $513 million when it is added to BSE Sensex on December 23.
