On Monday, December 8, the Sensex and Nifty 50 are expected to open lower ahead of the US Federal Reserve’s policy decision due tomorrow. Gift Nifty was trading near the 25,958 mark, showing a discount of about 85 points, indicating a weak start for Indian markets.
In early trade, Asian markets were down as investors stayed cautious ahead of the US Federal Reserve’s policy decision. A rate cut is expected, but worries persist that disagreements within the Fed could create more uncertainty for the markets.
On Monday, December 8, Foreign Institutional Investors (FIIs) were net sellers, selling equities worth ₹655.59 crore. Domestic Institutional Investors (DIIs) continued their positive stance, buying equities worth ₹2,542.49 crore, marking their 32nd consecutive session of net inflows.
Indian markets witnessed a sharp sell-off on Monday, December 8. The Sensex tumbled 609 points to 85,102.69, while the Nifty 50 fell 226 points to 25,960.55, breaking a two-day winning streak. Volatility spiked, with India VIX surging nearly 8%. InterGlobe Aviation was the biggest drag on the Nifty, plunging over 8% amid operational disruptions following a major staffing shortage.
Selling pressure was broad-based, with all 11 sectoral indices closing in the red. Realty stocks saw the steepest fall, slipping 3.5% to a seven-month low, while PSU Bank and Media indices also dropped 2–3%. FMCG, Pharma, Energy, and Auto declined over 1%.
The Broader markets were hit harder, as the Nifty Midcap 100 fell 1.83% and the Nifty Smallcap 100 slid 2.61%, marking its deepest fall in seven months.
Wall Street finished Monday’s session in the red, with most S&P 500 sectors slipping as traders grew cautious ahead of the Federal Reserve’s policy announcement due on Wednesday.
The Dow Jones Industrial Average dropped 215.67 points, or 0.45%, to 47,739.32. The S&P 500 retreated 23.89 points, or 0.35%, ending at 6,846.51, while the Nasdaq Composite eased 32.22 points, or 0.14%, to close at 23,545.90.
Investors are closely watching the Fed’s upcoming decision. A rate cut is mostly expected, but there may be disagreement within the committee, which could make this one of the most divided meetings since 2019. It’s uncommon for three or more members to vote against the decision — this has happened only nine times since 1990. Markets now see an 87.4% chance of a 25 bps cut, a major shift from earlier expectations when the odds were below 30% before recent commentary from Fed officials shifted sentiment.
Japanese government bond yields continued edging upward on Tuesday as markets prepared for a new auction and factored in the likelihood of upcoming Bank of Japan rate hikes. Concerns mounted after a strong earthquake hit northeastern Japan late Monday.
The five-year yield held at 1.445%, just shy of Monday’s 17-year high of 1.45%. The 10-year benchmark stayed at 1.965%, close to its recent 18-year peak, while the 20-year yield hit a new high of 2.955%.
Retail activity in the UK slowed despite heavy Black Friday promotions. According to the British Retail Consortium, November’s total retail sales rose only 1.4% year-on-year—the weakest performance since May and below the 12-month trend. Like-for-like sales increased 1.2%. Strong demand for appliances and tech products could not offset weaker spending on clothing and footwear.
Both the US dollar and Treasury yields edged higher on Monday as traders repositioned ahead of the Fed meeting. The 10-year yield touched its strongest level since September, supported by bond sell-offs across Europe and Japan. The dollar also gained against the yen, partly due to uncertainty surrounding Japan’s earthquake and the possibility that the Bank of Japan may delay its anticipated rate hike.
Gold held firm on Tuesday as investors looked beyond Wednesday’s expected rate cut and focused more on how the Fed may guide policy into 2026. Spot prices hovered near $4,193 an ounce, little changed from the previous session. Silver was marginally lower at $58.10.
Oil prices paused on Tuesday following their sharpest decline in nearly three weeks. West Texas Intermediate traded near $59 a barrel after falling 2% on Monday, while Brent crude stayed above $62.
Traders are awaiting fresh supply-demand insights from the US Energy Information Administration’s outlook due today, along with monthly assessments from the IEA and OPEC later in the week. Rising production and softer demand continue to fuel concerns about a widening global surplus.
Disclaimer: The article is for informational purposes only and not investment advice.
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