Why did the BSE Sensex and NSE Nifty 50 fall from their record highs on Tuesday?

Markets fell due to profit-booking in heavyweight financial stocks and a weak rupee.

What is the impact of foreign institutional investors (FIIs) on Indian markets?

FII outflows, totaling over ₹6,000 crore in three sessions, have pressured Indian equity markets.

What key event are investors waiting for in the Indian market this week?

Investors are awaiting the Reserve Bank of India's monetary policy outcome expected this week.

Home / Business and Economy / Indian Markets Tumble from Record Highs

Indian Markets Tumble from Record Highs

2 Dec, 2025

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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.