Stock markets tumble in early trade amid weak global cues, FII outflows

Sensex and Nifty tumbled amid weak global cues, persistent FII selling, pressure on IT and Reliance shares, and caution ahead of the US Federal Reserve’s policy outcome. Most Asian markets traded lower as crude prices softened and investor sentiment stayed fragile 

Mumbai: Equity benchmark indices Sensex and Nifty fell sharply in early trade on Tuesday in line with weak global cues, continuous foreign fund outflows and selling pressure in IT stocks and Reliance Industries.

Investor sentiment also turned cautious ahead of the US Federal Reserve’s policy meeting outcome, which is expected to provide cues on the interest rate trajectory.

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The 30-share BSE Sensex plunged by 636.22 points, or 0.75 per cent, to 84,466.47 in early trade. The 50-share NSE Nifty depreciated by 193.25 points, or 0.74 per cent, to 25,767.30.

Among the Sensex firms, Asian Paints, Trent, Mahindra & Mahindra, Tata Steel, Tata Consultancy Services, Reliance Industries, Tata Motors Passenger Vehicles, Bharat Electronics Ltd, Tech Mahindra, NTPC, HCL Technologies, Infosys and UltraTech Cement were the laggards.

Bharti Airtel and Hindustan Unilever were the only gainers in the morning trade.

The US Federal Reserve is set to begin its two-day policy meeting later on Tuesday, where the central bank’s Federal Open Market Committee (FOMC) will decide on key benchmark interest rates for the world’s largest economy.

The outcome will be announced on Wednesday. Meanwhile, Foreign Institutional Investors (FIIs) offloaded equities worth Rs 655.59 crore on Monday, while Domestic Institutional Investors (DIIs) bought stocks worth Rs 2,542.49 crore, according to exchange data.

“Despite hopes pinned on a potential US Fed cut on December 10, sentiment remains fragile with FIIs continuing to sell, the rupee weakening towards 90/USD, and global cues turning softer,” Prashanth Tapse , Senior VP (Research), Mehta Equities Ltd, said.

In Asian markets, Hong Kong’s Hang Seng index, South Korea’s KOSPI and Shanghai’s SSE Composite index were trading in the negative territory while Japan’s Nikkei 225 benchmark was quoting in the green zone.

The US markets ended lower in overnight deals on Monday as investors turned cautious ahead of the Fed meeting.

Brent crude, the global oil benchmark, slipped 0.21 per cent to USD 62.36 per barrel.

On Monday, the 30-share BSE Sensex plunged by 609.68 points to close at 85,102.69.

Snapping a two-day gaining streak, the 50-share NSE Nifty declined by 225.90 points to settle at 25,960.55.