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Indian Markets Tumble from Record Highs
2 Dec
Summary
- Indian stock markets reversed from record highs due to profit-booking.
- A weak rupee and reduced foreign investment contributed to the downturn.
- Markets await the upcoming Reserve Bank of India policy decision.
Indian equity markets experienced a sharp downturn on Tuesday, with both the BSE Sensex and NSE Nifty 50 indices surrendering recent gains and closing significantly lower. The sell-off was primarily fueled by profit-taking in heavyweight financial stocks, including HDFC Bank and ICICI Bank, as the market anticipated the Reserve Bank of India's upcoming monetary policy decision.
A combination of a depreciating rupee, which hit fresh lows, and subdued foreign institutional investor (FII) flows further pressured sentiment. FIIs offloaded substantial equity worth ₹1,171.31 crore on Monday, with cumulative selling over the past three sessions exceeding ₹6,000 crore, while domestic institutional investors (DIIs) provided some support by buying stocks worth ₹2,558.93 crore.
Market participants are now observing a cautious approach, anticipating a range-bound movement until the RBI's policy announcement. While strong GDP figures suggest economic optimism, concerns over slowing industrial output and potential impacts from US-India trade discussions add to the prevailing uncertainty, even as domestic macro fundamentals remain robust.
