Sensex slides 1046 pts in 2 days, Nifty below 25,850; more downside ahead?

Domestic equity benchmarks Sensex and Nifty slipped for a second straight session on Tuesday as investors turned cautious ahead of the US Federal Reserve’s rate decision and uncertainty around a potential US trade deal. Sentiment weakened further after reports that President Donald Trump may consider new tariffs on Indian rice, adding to market jitters.

At the close, the Sensex closed 436.41 points, or 0.51%, lower to finish at 84,666.28, taking its two-day slide to 1046 points. The Nifty declined 120.90 points, or 0.47%, to settle at 25,839.65.

Asian Paints topped Sensex laggards, falling 4.61% to Rs 2,790.90. Tech Mahindra followed with a 1.99% decline. Other major losers included HCL Technologies, Tata Steel, Maruti Suzuki and Sun Pharma, which fell 1.78%, 1.56%, 1.16% and 1.05%, respectively.

Five stocks, namely, ICICI Bank, HDFC Bank, Reliance Industries, Asian Paints and Infosys, contributed heavily to the Sensex’s drop.  

On the sectoral front, the BSE IT dropped 0.89% to settle at 36,843, spearheading the decline. The BSE Auto index also ended in the red, down 0.63% to close the session at 60,973.37. 

Across the broader market, the BSE 100 index declined 0.30%, while the BSE LargeCap index fell 0.25%.

Overall, of the 4,331 actively traded BSE stocks, 2,616 closed higher, 1,550 declined, and 165 remained unchanged. During the session, 67 stocks touched their 52-week highs, while 512 fell to 52-week lows. Meanwhile, 169 scrips hit their upper circuits, and 162 were locked in lower circuits.

Vinod Nair, Head of Research at Geojit Investments, said domestic equities opened on a soft note, extending the recent bout of profit booking as investors turned cautious ahead of tomorrow’s US Fed policy outcome. He added that weakness in the rupee, sustained FII outflows, and lingering uncertainty around the US–India trade deal further weighed on sentiment.

Nair said “IT stocks led the decline, while PSU banks, realty, and consumer durables gained, with small caps outperforming other indices. Global sentiment was further pressured by surging Japanese bond yields and expectations of BoJ tightening in its upcoming December meeting.”

“ While the markets largely anticipate a 25-bps rate cut by the Fed and a rate hike by the BoJ, forward guidance for 2026 will be critical. In the near term, central bank commentary, currency movement, and FII flows will steer sentiment, while domestic macro resilience is expected to provide a cushion against downside risks," Nair added.