Market Turmoil: Sensex and Nifty Plunge as Investors Cash Out Ahead of Fed Decision

The Indian stock market faced a significant decline on Monday, with both the Sensex and Nifty indices dropping sharply as investors rushed to take profits. This downturn follows two days of gains and comes ahead of a crucial policy decision from the US Federal Reserve. Analysts suggest that the market's negative sentiment is influenced by ongoing foreign investor sell-offs and global monetary policy concerns. Despite some stocks gaining, the overall market trend remains bearish, with volatility heightened by rising Japanese bond yields. As investors navigate these challenges, the outlook for the market remains uncertain.

By Narendra Chaudhary Dec 8, 2025, 17:05 IST

Market Overview

Mumbai: The equity markets faced a significant downturn on Monday, with the Sensex and Nifty indices dropping sharply after two days of gains. Investors opted to secure profits amidst ongoing stock sell-offs by foreign investors.

Market analysts noted a shift towards caution as traders awaited the upcoming policy announcement from the US Federal Reserve, which contributed to the negative sentiment.

The BSE Sensex fell by 609.68 points, or 0.71%, closing at 85,102.69. At one point during the trading session, it had dropped by 836.78 points, reaching an intraday low of 84,875.59.

Similarly, the NSE Nifty index saw a decline of 225.90 points, or 0.86%, finishing at 25,960.55. It hit a low of 25,892.25 during the day, down by 294.2 points or 1.12%.

Among the stocks that dragged down the Sensex were Bharat Electronics Ltd, Eternal, Trent, Tata Steel, Bajaj Finance, Adani Ports, Bajaj Finserv, State Bank of India, PowerGrid, Asian Paints, Tata Motors Passenger Vehicles, Titan, NTPC, Kotak Mahindra Bank, Larsen & Toubro, and Bharti Airtel.

In contrast, Tech Mahindra, HCL Technologies, Reliance Industries, and HDFC Bank were the few stocks that managed to gain.

"The market saw a widespread decline, dipping below the 26,000 mark as investors adopted a cautious stance ahead of the Fed's policy decision this week," stated Vinod Nair, Head of Research at Geojit Investments Ltd.

He further explained that despite strong domestic growth indicators and a recent rate cut by the RBI, short-term market sentiment is clouded by global monetary policy uncertainties, ongoing foreign institutional investor (FII) outflows, and currency depreciation.

Nair also highlighted that volatility was exacerbated by a rise in Japanese bond yields to multi-year highs, raising concerns about a potential unwinding of the yen carry trade.

In other Asian markets, most closed positively, with South Korea's KOSPI up by 1.34%, Shanghai's SSE Composite index increasing by 0.54%, and Japan's Nikkei 225 rising by 0.13%. However, Hong Kong's Hang Seng index fell by 1.23%.

European markets displayed mixed performance, while Wall Street had a positive close on Friday.

On the foreign investment front, FIIs sold equities worth Rs 438.90 crore on Friday, while Domestic Institutional Investors (DIIs) purchased stocks valued at Rs 4,189.17 crore, according to exchange data.

Brent crude oil prices decreased by 0.61% to USD 63.37 per barrel.

On the previous Friday, the BSE Sensex had gained 447.05 points to close at 85,712.37, while the NSE Nifty rose by 152.70 points, finishing at 26,186.45.