Indian Stock Market Declines as Investors Await Federal Reserve Meeting

The Indian stock market faced a downturn on 9 December 2025, with both the Nifty50 and BSE Sensex indices experiencing significant losses for the second consecutive day. Investors opted to reduce their positions prior to an anticipated policy announcement from the United States Federal Reserve.

The Nifty50 index of the National Stock Exchange (NSE) dropped by 120.90 points, or 0.47 per cent, concluding the day at 25,839.65. During trading, it reached a low of 25,728 after a decline of 232.55 points. Meanwhile, the BSE Sensex fell by 436.41 points, or 0.51 per cent, finishing at 84,666.28, marking its lowest close in nearly two weeks. At one point during the trading day, the Sensex plunged by 719.73 points to reach 84,382.96, largely impacted by declines in major sectors including private banking, oil, and information technology.

Market analysts attributed the drop to ongoing foreign fund withdrawals and negative global economic indicators, which have eroded investor confidence. Notable declines were observed among various companies listed on the Sensex, including Asian Paints, Tech Mahindra, HCL Technologies, Tata Steel, Maruti Suzuki India, Sun Pharmaceuticals, Tata Consultancy Services, ICICI Bank, Bajaj Finance, UltraTech Cement, Mahindra & Mahindra, and Tata Motors Passenger Vehicles.

Conversely, several stocks managed to post gains despite the overall market decline. These included Eternal, Titan, Adani Ports, Bharat Electronics Ltd, State Bank of India, Bajaj Finserv, NTPC, and Bharti Airtel.

Vinod Nair, Head of Research at Geojit Investments Ltd, commented on the market conditions: "Domestic equities opened lower, extending profit booking amid caution ahead of tomorrow's US Fed policy decision, rupee weakness, persistent foreign institutional investor outflows, and ongoing uncertainty over the US–India trade deal. IT stocks led the decline, while public sector banks, real estate, and consumer durables showed resilience, with small-cap stocks outperforming other indices."

The US Federal Reserve commenced its two-day policy meeting on the same day, during which the Federal Open Market Committee (FOMC) is expected to make critical decisions regarding interest rates that could have far-reaching implications for the US economy.

In Asian markets, indices in Hong Kong, Shanghai, and South Korea closed lower, while Japan's Nikkei 225 index ended on a positive note. European markets showed some gains, but Wall Street experienced a downturn on the previous day.

Nair further noted the influence of rising Japanese bond yields and potential changes in Bank of Japan policy during its upcoming meeting, which are contributing to global market sentiment. Investors are anticipating a 25-basis-point rate reduction from the Federal Reserve and an increase in rates from the Bank of Japan, with guidance for 2026 being a focal point for market participants.

On Monday, foreign institutional investors sold equities worth ₹655.59 crore, while domestic institutional investors bought stocks valued at ₹2,542.49 crore, according to exchange data.

Nair concluded by stating that in the near term, commentary from central banks, currency fluctuations, and foreign institutional investor flows will influence market sentiment. However, he expressed optimism that domestic macroeconomic resilience would provide some protection against potential downside risks.

In commodity markets, Brent crude oil prices fell by 0.27 per cent to USD 62.33 per barrel. On the previous trading day, the BSE Sensex had also seen a decline, dropping by 609.68 points to close at 85,102.69, while the NSE Nifty experienced a fall of 225.90 points, concluding at 25,960.55.

(Disclaimer: The insights and recommendations regarding the stock market and personal finance presented by experts are based on their own analyses and do not necessarily reflect the views of this publication.)