Indian stock markets experienced a significant decline on December 9, 2025, continuing the losses from the previous session. Both the Sensex and Nifty indices traded sharply lower, reflecting a cautious investor sentiment.
Market Performance:
The BSE Sensex fell by over 700 points, dropping below 84,500. Similarly, the NSE Nifty 50 slipped below the 25,800 mark. The broader market also felt the impact, with the Nifty MidCap and SmallCap indices each declining by 1.5%. Overall market breadth was weak, indicating widespread selling pressure.
Key Factors Behind the Decline:
Several factors contributed to the downturn in the Indian stock market:
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Uncertainty over India-US Trade Deal: Lingering uncertainty surrounding a potential trade agreement between India and the United States weighed on investor sentiment. Reports that US President Donald Trump had signaled the possibility of imposing new tariffs on Indian rice imports raised concerns that trade negotiations between Washington and New Delhi remained unresolved.
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US Federal Reserve (Fed) Meeting: Investors were cautious ahead of the US Federal Reserve's policy decision. The meeting, scheduled for December 10, was considered significant after weeks of shifting rate expectations. While a 25-basis-point rate cut was broadly expected, the possibility of a surprise hold led investors to reduce their positions.
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Global Cues: Mixed signals from global economies, including concerns about inflation and geopolitical tensions, contributed to a risk-off sentiment among investors.
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Rupee Weakness: A weakening rupee added to the strain on domestic equities. The rupee is likely to open a tad lower and stay on the defensive, weighed down by weak portfolio flows and higher dollar demand.
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Foreign Institutional Investor (FII) Outflows: Continued selling by foreign institutional investors (FIIs) exerted downward pressure on the market.
Sectoral Performance:
Most sectors experienced declines, with the Nifty Auto, IT, and Metal indices falling over 1% each. The metal sector emerged as a top laggard, reflecting concerns over commodity prices and the global demand outlook.
Expert Views:
According to experts, several factors contributed to the market's weakness, including caution ahead of the US Fed meeting, uncertainty over the India-US trade deal, and continuous FII outflows. Some analysts suggested that the market had reached oversold territory and could respond swiftly to any positive trigger.
Technical Indicators:
Technically, the Sensex's position above its 50-day moving average (DMA), which is above the 200 DMA, indicates that the medium-term trend remains intact despite the recent pullback. However, the current decline and weak market breadth suggest that investors are digesting recent gains and awaiting clearer signals before committing fresh capital.
Overall Sentiment:
Overall, the Indian equity markets reflected a cautious investor stance amid sectoral weaknesses and mixed global signals. The decline in the Sensex and Nifty indices, coupled with weak market breadth, highlighted the dominance of selling pressure across most stocks. Institutional investors appeared to adopt a wait-and-watch approach, while technical indicators suggested that the medium-term trend remained intact despite short-term volatility.
