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Stock indices in India slumped for the third consecutive session on Wednesday, as investors awaited the Federal Reserve's monetary policy decision, which is set to be announced later today.
The Sensex closed at 80,182.20 points, down 502.25 points or 0.62 per cent, while the Nifty ended at 24,198.85 points, declining by 137.15 points or 0.56 per cent. The Sensex remains nearly 6,000 points below its all-time high of 85,978 points. "Market sentiment remains cautious ahead of the FOMC meeting and potential policy and tariff shifts from the incoming US administration," said Vinod Nair, Head of Research at Geojit Financial Services. In a departure from its recent monetary policy stance of holding interest rates steady across eight consecutive meetings, the US Federal Reserve has implemented a cumulative 75 basis points interest rate cut over its last two review meetings in September and November. "This caution is further influenced by India's premium valuation, which is significantly above the current earnings growth trajectory that has slowed over the past two quarters," Nair added. Additionally, the widened trade deficit for November has dampened domestic sentiment, according to Nair. India's merchandise trade deficit for November stood at USD 37.84 billion, driven by a surge in imports relative to exports. This is reportedly the highest monthly trade deficit on record. Kotak Securities attributed today's market decline to profit booking. "Technically, the market experienced selling pressure at higher levels once again," said Shrikant Chouhan, Head of Equity Research at Kotak Securities. Last week, Indian equity markets rebounded sharply in the second half on Friday, managing to end the week with marginal gains. (ANI)
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