Sensex falls over 400 pts, Nifty below 25,950 as US trade deal uncertainty drags

Indian equities traded lower on Tuesday, with the Sensex and Nifty extending the previous session’s decline as caution prevailed amid persistent foreign portfolio outflows, a weakening rupee and continued uncertainty over a trade agreement with the United States.

The S&P BSE Sensex fell over 400 points, at trade below to 84,800, while the NSE Nifty 50 dropped 100 points, slipping below 25,950 mark.

On the 30-stock Sensex, Eternal, Axis Bank, HCL Technologies, Infosys and Titan were among the biggest drags, with shares sliding between 1% and 3%.


Broader markets were also under pressure, with small-cap stocks down 0.2% and mid-caps easing 0.1%.

The benchmark indexes have been range-bound for the past two weeks after touching record highs on December 1, as investors await fresh catalysts and clarity on a potential India-U.S. trade agreement.

Expert views
The market is moving into a consolidation mode in the near-term and since sustained FII selling is easily getting absorbed by DII buying and economic fundamentals are indicating significant improvement, the market will find support on weakness, said Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, adding that the "rupee also is likely to stabilise since November trade deficit has come down to $24.53 billion from $41.64 billion in October. This will take away some pressure on the FIIs to sell anticipating further depreciation."

The weakening of the AI trade continues in the U.S., Vijayakumar said, adding that "chances are that at some point in 2026, AI trade will weaken significantly facilitating capital flows into EMs like India. However, if the market is to show sustained strength, earnings recovery is essential. Q3 numbers will indicate where earnings recovery is happening. Bank Nifty will continue to be strong."

FII/DII Tracker
On the institutional front, Foreign Institutional Investors (FIIs) sold equities worth a little over Rs 1,468 crore on December 15, while Domestic Institutional Investors (DIIs) were net buyers to the tune of Rs 1,792 crore.

Global Markets
Asian equities slid on Tuesday and the dollar hovered near two-month lows as investors turned cautious ahead of a run of U.S. economic data, including a closely watched jobs report that could shape expectations for Federal Reserve policy next year.

That defensive stance weighed on risk assets more broadly. Bitcoin, which fell to a two-week low in the previous session, was little changed at $86,407.53. Demand for havens lifted gold toward eight-week highs, with prices at $4,307.69 an ounce, up 0.15% on the day.

Markets are focused on the combined U.S. employment reports for October and November due later on Tuesday, followed by an inflation reading on Thursday. Some key details, however, will be absent after the longest government shutdown in history disrupted data collection.

In equities, MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1% in early trading. Japan’s Nikkei and South Korea’s benchmark index each dropped more than 1%. U.S. Nasdaq futures and European equity futures were down about 0.5%, signalling a shaky start for Western markets.

Crude impact
Oil prices edged lower in early Asian trade on Tuesday, extending the previous session’s decline as signs of progress toward a Russia-Ukraine peace deal fuelled expectations that sanctions could eventually be eased.

Brent crude futures slipped 24 cents, or 0.4%, to $60.32 a barrel by 0101 GMT. U.S. West Texas Intermediate was down 22 cents, or 0.39%, at $56.60 a barrel.

Rupee vs Dollar
The Indian rupee fell to a fresh record low for a fourth straight session on Tuesday, weighed down by dollar demand linked to the likely rollover of positions in the non-deliverable forwards market and continued portfolio outflows. The currency slipped to an all-time low of 90.82 per dollar, breaking Monday’s record trough of 90.7875.

The rupee has fallen about 6% against the U.S. dollar this year, making it one of the worst-performing emerging market currencies, pressured by weak foreign flows and the impact of steep U.S. tariffs on Indian exports.

The dollar index, which tracks the greenback against six major peers, was little changed at 98.295, hovering near its lowest level in nearly two months.

(with inputs from agencies)