Indian stock markets tumbled as it opened sharply lower on Thursday following the US Federal Reserve’s cautious outlook on interest rate cuts for 2025.
The Fed trimmed rates by 25 basis points but halved its forecast for cuts in 2025, focusing on employment and price stability. This move disappointed global investors, triggering a sell-off across major markets.
At 9:30 AM in Indian Markets, the Sensex plunged 1,023.67 points or 1.28% to 79,158.53. The Nifty slipped 306.45 points or 1.27% to 23,892.40. Market sentiment remained negative, with only 223 stocks advancing and 2,029 declining on the NSE.
Sectoral indices mirrored the downturn. Nifty Bank dropped 1.50%, while Nifty Midcap 100 and Nifty Smallcap 100 declined 1.61% and 1.79%, respectively.
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Major Sensex losers included Infosys, HCL Tech, Asian Paints, Tata Steel, and SBI. In contrast, Hindustan Unilever and ITC posted modest gains.
Wall Street’s overnight reaction was equally grim. The Dow Jones fell 2.58%, while the S&P 500 and Nasdaq tumbled 2.95% and 3.56%, respectively. Asian markets in Jakarta, Bangkok, Seoul, Tokyo, China, and Hong Kong also traded in the red.
Experts cited high valuations and the Fed’s scaled-back guidance as triggers for the sell-off. “Markets needed a reason to correct, and the Fed’s stance provided it,” they said.
Foreign institutional investors (FIIs) sold equities worth ₹1,316.81 crore on December 18. However, domestic institutional investors offset this with net purchases of ₹4,084.08 crore.
Analysts believe today’s dip could present buying opportunities. “Growth stocks in the broader market may bounce back as FIIs have limited impact in this segment,” they added.
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