Indian stocks closed sharply lower on Tuesday, dragged down by selling across major sectors including PSU banks, auto, IT, financial services, pharma, FMCG, metal, and realty. The decline comes as investors brace for crucial policy decisions from global central banks, particularly the US Federal Reserve, which is holding its last policy meeting of the year on Tuesday and Wednesday.
The Sensex ended the day at 80,684.4, down 1,064.12 points or 1.30%, while the Nifty fell 332.25 points, or 1.35%, to close at 24,336.
Market experts point to widespread pessimism ahead of policy announcements from the US Fed, Bank of Japan, and Bank of England. While a 25 basis point rate cut from the US Fed is largely expected, investors remain wary of any hawkish signals that could indicate further tightening.
The Nifty Bank also felt the pressure, closing at 52,834.80, down 746.55 points, or 1.39%. The Nifty Midcap 100 index and Nifty Smallcap 100 index dropped 0.57% and 0.68% respectively.
On the Bombay Stock Exchange (BSE), 1,578 shares advanced while 2,440 declined. The media sector was the only one to show gains.
Among the Sensex constituents, major losers included Bharti Airtel, IndusInd Bank, JSW Steel, TCS, Asian Paints, L&T, Bajaj Finserv, Reliance, Nestle India, HDFC Bank, Maruti, M&M, Tata Steel, and Power Grid. ITC was the sole gainer amongst the top performers.
The Indian rupee remained relatively stable near 84.90 against the US dollar as markets await the Fed’s final policy decision of the year on December 18.
“A dovish tone from the Fed could weaken the dollar index, offering some relief to the rupee,” said Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities. “However, any uncertain or hawkish remarks may strengthen the dollar and maintain downward pressure on the rupee. We anticipate the rupee to trade between 84.75 and 85.05.”
(With IANS inputs)