Market Watch: Why Sensex fell 610 points, Nifty fell below 26,000 | The Economic Times Podcast

Hello, you are listening to ET Markets Radio, I am Neha Vashishth. Welcome to a brand new episode of ET Market Watch. Let’s quickly jump to the main highlights:Indian markets closed sharply lower on Monday as selling pressure increased across the board.

The Sensex fell 610 points while the Nifty fell below 26,000 points as investors booked gains in small and mid-caps and increased selling into heavyweight stocks.

What caused the fall?
Here are the five most important factors.

First, caution ahead of the US Federal Reserve’s December 10 policy decision. Although a rate cut is expected, uncertainty about the outcome has prompted investors to reduce their risk.

Secondly, continued FII outflows continue to weigh on sentiment. Foreign investors have sold more than ₹6,500 crore so far in December, putting pressure on stocks despite strong domestic buying.

Third, the rupee, which is hovering near record lows, has roiled the markets. A weaker currency increases import costs and inflation risk, putting pressure on already fragile sentiment.

Fourth, uncertainty surrounding the India-US trade deal remains. While talks are ongoing, the lack of clarity is keeping investors cautious.

And finally, rising Japanese government bond yields are raising fears that a carry trade in the yen will ease, a move that could trigger new volatility in emerging markets including India.

Bottom line: Global uncertainty, currency pressures and foreign fund sales are keeping markets tense.

That’s all for this episode, until the next one.