Sensex, Nifty subdued as D-Street remains cautious ahead of Fed call

Indian shares opened flat on Monday, with the Sensex and Nifty showing little direction as investors entered a week of IPOs. Now that last week’s Reserve Bank of India policy decision has been digested, traders are keeping a lid on risk ahead of the US Federal Reserve’s rate hike later this week, where a cut is widely expected.The S&P BSE Sensex fell 17 points, or 0.02%, to 85,695 at the open, while the NSE Nifty 50 fell 15 points, or 0.06%, to start the session at 26,171.

On the 30-share Sensex, Bajaj Finance, Asian Paints, Bharat Electronics, ICICI Bank and Trent were among the early laggards, declining between 0.3% and 1%.Midcap and smallcap stocks remained largely unchanged.

InterGlobe Aviation, the country’s largest airline, extended last week’s decline, falling more than 4% after regulators warned the airline over thousands of flight cancellations.

Ola Electric rose 3% after the company said it had started mass deliveries of vehicles equipped with the indigenously developed 4680 Bharat Cell battery pack.

Expert views
Emerging positive and negative news has the potential to keep the market volatile in the short term and robust economic growth and indications of a rebound in earnings growth are supportive for markets, said Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments. He added that the massive fiscal and monetary stimulus to the economy this year has contributed to a sharp revival in GDP growth, as evidenced by the 8.2% GDP growth in the second quarter and the upward revision of GDP growth in the second quarter of 2026. 7.3% is a good sign for the market.

“The low GDP deflator, due to low inflation, has had an impact on nominal GDP growth and corporate earnings growth. But the leading indicators clearly show that earnings growth of around 15% is achievable in FY27. This is positive for the market. However, there are also strong negative factors that could impact the market. The continued depreciation of the rupee has forced financial institutions to continuously sell into the market. In short, there is potential for a high volatility,” said Vijayakumar.

FII/DII tracker
On the institutional front, foreign institutional investors (FIIs) sold shares worth around Rs 439 crore on December 5, while domestic institutional investors (DIIs) were net buyers to the tune of Rs 4,189 crore.

Global markets
Asian markets wobbled on Monday as investors all but priced in a Federal Reserve rate cut this week, although the decision is set to be one of the most controversial in years, with some officials openly opposing easing.

Futures now assign about an 85% probability of a quarter-point decline from the current range of 3.75%–4.0%. A grab would be a big shock. A Reuters survey of 108 economists found that only 19 expect the Fed to stay in place.

It’s a busy week for central banks, with Canada, Switzerland and Australia also meeting, and all are expected to keep policy steady. The Swiss National Bank may prefer to compensate for the strong franc with another interest rate cut, but at a policy rate of 0% it is reluctant to turn negative.

Japan’s Nikkei fell 0.3% after modest gains last week. The South Korean benchmark also fell 0.3%, after rising 4.4% following the confirmation of lower US tariffs. MSCI’s Asia ex-Japan index fell 0.1% in subdued trading.

China’s blue chips will track their course on November trade data, due later Monday, offering insight into export resilience amid continued tariff pressure.

On the bond front, long-term Treasuries weakened on concerns that the Fed could combine any cut with aggressive guidance. The ten-year yield rose to 4.146%, after rising 9 basis points last week.

Gold was trading at $4,202 an ounce, just below Friday’s record peak of $4,259, while silver was hovering near an all-time high.

Rough impact
Oil prices remained near their highest levels in two weeks on Monday as traders counted on a Federal Reserve rate cut this week to boost US growth and in turn boost demand, while keeping a close eye on geopolitical risks threatening supplies from Russia and Venezuela.

Brent crude rose 9 cents, or 0.14%, to $63.84 a barrel as of 0321 GMT. US West Texas Intermediate added 8 cents, or 0.13%, to $60.16.

Rupee vs dollar
The Indian rupee opened modestly weaker at 90.0625 per US dollar on Monday compared to Rs 89.98 at the previous close, extending mild depreciation after the currency slipped past Rs 90 last week.

The dollar index fell 0.1% to 98.87, while broader currency markets were largely subdued ahead of a busy series of central bank meetings in Australia, Switzerland and Canada.

(with input from agencies)