Indian Benchmarks Slip Amid Profit Booking and US Tariff Concerns

Market Update at 3:45 PM: Indian stock markets ended lower on Tuesday as a fresh wave of profit booking pressured benchmark indices. Market sentiment also weakened after reports suggested that US President Donald Trump may consider imposing new tariffs on Indian rice, raising concerns over unresolved trade negotiations between Washington and New Delhi.

At 03:30 PM, the BSE Sensex closed at 84,666.28, down 436.41 points or 0.51 per cent, while the NSE Nifty settled at 25,839.65, lower by 120.90 points or 0.47 per cent.

Large-Cap counters such as Asian Paints, Tech Mahindra, Trent, Eternal, Reliance Industries, TCS, Ultratech Cement, Tata Steel, M&M, Tata Motors PV, HCL Tech, and BEL were among the Top Losers on the Sensex, shedding up to 3.6 per cent. Only HUL and Bharti Airtel managed to stay in the green on the 30-stock index.

In contrast, the broader markets witnessed resilience. The Nifty MidCap index gained 0.8 per cent, while the Nifty SmallCap index advanced 0.42 per cent, indicating selective buying beyond frontline stocks.

Sectoral performance was mixed. Nifty IT, Auto, and Financial Services declined by nearly 1 per cent, reflecting selling pressure. Meanwhile, Nifty PSU Bank, FMCG, Media, Consumer Durables, and Chemicals traded in the red, contributing to the subdued mood across equity segments.

Overall, concerns over global trade developments and cautious investor sentiment ahead of key global cues kept the markets under pressure.

Market Update at 12:30 PM: Indian stock markets traded gap-down on Tuesday as a fresh wave of profit booking hit key indices. Sentiment weakened further after reports suggested that U.S. President Donald Trump may consider imposing new tariffs on Indian rice, raising worries about stalled trade negotiations between Washington and New Delhi.

At 12:00 PM, the BSE Sensex stood at 84,771.59, down 331.10 points or 0.39 per cent, while the NSE Nifty was at 25,866.90, lower by 93.65 points or 0.36 per cent.

Major laggards on the Sensex included Asian Paints, Tech Mahindra, Trent, Eternal, Reliance Industries, TCS, Ultratech Cement, Tata Steel, M&M, Tata Motors PV, HCL Tech, and BEL, falling up to 3.6 per cent. HUL and Bharti Airtel were the only two stocks trading in the green on the 30-share index.

The broader market outperformed the benchmarks, with the Nifty MidCap index gaining 0.8 per cent and the Nifty SmallCap index rising 0.42 per cent.

Sectoral trends remained mixed. Nifty IT, Auto, and Financial Services indices declined nearly 1 per cent, reflecting weak global cues and profit booking. Conversely, Nifty PSU Bank, FMCG, Media, Consumer Durables, and Chemicals were also trading in the red, mirroring the cautious market mood.

Market Update at 10:10 AM: India’s equity benchmarks opened lower on Tuesday after recording their steepest decline in over two months in the previous session. Market sentiment remained weak as uncertainty around a potential US–India trade deal and caution ahead of the US Federal Reserve’s rate decision weighed on investors.

The Nifty 50 fell 0.36 per cent to 25,867.1, while the BSE Sensex slipped 0.42 per cent to 84,742.87 as of 9:15 a.m. IST. All 16 major sectoral indices were in the red, mirroring broad-based weakness across the market. The Smallcap and Midcap indices also declined, shedding 0.3 per cent each.

Pressure intensified on rice-exporting companies after reports indicated that the US administration may impose tariffs on rice imports from India. Shares of KRBL, Chaman Lal Setia, LT Foods and Kohinoor Foods fell between 1.2 per cent and 4 per cent. U.S. Treasury Secretary Scott Bessent stated that Washington is still working toward a trade agreement with India, though the tariff concerns kept traders cautious.

Globally, the MSCI Asia Pacific index (excluding Japan) slipped 0.6 per cent as investors awaited the Federal Reserve’s upcoming policy decision. The Fed is widely expected to cut rates on Wednesday, but major Wall Street banks now foresee fewer rate reductions in 2026 due to persistent inflation risks and expectations of a stronger U.S. economic outlook.

Pre-Market Update at 7:40 AM: Indian equity benchmarks are poised for a soft start on Monday, December 8, as global sentiment weakens ahead of the US Federal Reserve’s key policy announcement scheduled for tomorrow. Gift Nifty traded near the 25,958 level, reflecting a discount of around 32 points and signaling a cautious opening for domestic markets.

Asian markets also declined as investors grew uneasy about how aggressively the US Federal Reserve may ease policy beyond this week’s widely expected rate cut. While a reduction in rates is anticipated, concerns persist that a divided stance within the Federal Open Market Committee could heighten uncertainty.

Foreign Institutional Investors (FIIs) remained net sellers on December 8, offloading equities worth Rs 655.59 crore. Meanwhile, Domestic Institutional Investors (DIIs) continued their strong buying streak for the 32nd straight session, with net purchases of Rs 2,542.49 crore.

Indian markets witnessed a sharp downturn on Monday. The Sensex slipped 609 points to close at 85,102.69, while the Nifty 50 declined 226 points to 25,960.55, snapping a two-day winning run. Volatility picked up, with India VIX climbing nearly 8 per cent. InterGlobe Aviation dragged the index lower after its stock plunged more than 8 per cent amid operational disruptions driven by a significant staffing shortage.

Selling pressure was visible across all 11 sectoral indices. Realty stocks led the slump, falling 3.5 per cent to a seven-month low, while PSU Bank and Media indices dropped between 2–3 per cent. FMCG, Pharma, Energy, and Auto sectors also ended more than 1 per cent lower. Broader markets fared even worse, with the Nifty Midcap 100 sliding 1.83 per cent and the Nifty Smallcap 100 tumbling 2.61 per cent—its steepest decline in seven months.

Wall Street also closed lower on Monday as traders remained cautious ahead of the Fed’s policy decision. The Dow Jones Industrial Average fell 215.67 points, or 0.45 per cent, to 47,739.32. The S&P 500 slipped 23.89 points, or 0.35 per cent, to 6,846.51, while the Nasdaq Composite declined 32.22 points, or 0.14 per cent, to finish at 23,545.90.

Investors are now focused on the Fed’s upcoming announcement, with markets pricing in an 87.4 per cent probability of a 25-basis-point rate cut. Analysts expect disagreements within the committee, potentially making this one of the most divided meetings since 2019. Historically, three or more dissenting votes have been recorded only nine times since 1990.

In Japan, government bond yields continued trending higher as markets prepared for a new auction and assessed the likelihood of future Bank of Japan rate hikes. The five-year yield remained near a 17-year high at 1.445 per cent, while the 10-year benchmark hovered at 1.965 per cent, close to its highest level in 18 years. The 20-year yield reached a fresh high of 2.955 per cent. Sentiment was further dampened by a strong earthquake that struck northeastern Japan late Monday.

UK retail trends reflected weakness despite aggressive Black Friday promotions. The British Retail Consortium reported that total retail sales in November rose just 1.4 per cent year-on-year, the slowest pace since May and below the 12-month average. Like-for-like sales grew 1.2 per cent, as strong demand for electronics failed to offset weaker clothing and footwear sales.

The US dollar and Treasury yields edged higher on Monday as investors positioned themselves ahead of the Federal Reserve’s announcement. The 10-year US Treasury yield touched its highest level since September, supported by a broader bond sell-off across Europe and Japan. The dollar strengthened against the yen, influenced by uncertainty following Japan’s earthquake and speculation that the Bank of Japan may delay its anticipated rate hike.

Gold prices remained steady on Tuesday as investors awaited clarity on the Fed’s long-term policy direction. Spot gold traded near USD 4,193 an ounce, largely unchanged from the previous session. Silver slipped marginally to USD 58.1045. The Bloomberg Dollar Spot Index rose 0.1 per cent on Monday, while platinum and palladium saw limited movement.

Oil prices paused on Tuesday after their sharpest fall in nearly three weeks. West Texas Intermediate traded near USD 59 a barrel following a 2 per cent decline on Monday, while Brent crude stayed above USD 62. Markets are now awaiting supply-demand forecasts from the US Energy Information Administration, along with monthly updates from the IEA and OPEC. Rising output and weak demand continue to raise concerns about a widening global surplus.

For today, Kaynes Technologies, Sammaan Capital and Bandhan Bank will remain on the F&O ban list.

Disclaimer: The article is for informational purposes only and not investment advice.