Stock Market Today: Sensex Drops 320 Points to 84,210; Nifty 50 Slips to 25,480

Market mood turns cautious as Indian indices slip after global signals weaken

The Indian stock market opened lower and stayed under pressure through the session. The Nifty 50 moved down into the mid-25,000 range, and the BSE Sensex fell by several hundred points. The weakness came after soft global cues, especially as investors waited for an important US Federal Reserve policy announcement. Uncertainty around interest rates overseas made traders more cautious, and this caution was immediately reflected in Indian indices.

Another factor weighing on sentiment was renewed discussion around trade issues between the United States and India. Concerns about possible tariff changes affected exporter-linked stocks, adding further stress to the broader market mood.

Sector Pressure Widens Across the Market

Selling pressure was visible in almost every major sector. Metals, information technology, and automobile stocks were the largest losers for the day. Mid-cap and small-cap stocks also struggled and saw sharper declines than the frontline indices.

Such underperformance from mid- and small-cap baskets usually appears when global markets turn risk-averse. Futures trading in the GIFT Nifty before market open signalled the same tone, as it traded at a discount to domestic futures and hinted at weakness ahead of the cash market session.

Foreign Investors Continue to Sell

Foreign institutional investors contributed significantly to the downward trend. December began with strong foreign selling, and early-month outflows were much higher than the levels seen in November. Heavy FII exits reduce liquidity in the market and often hit large-cap companies first, which drags down index levels.

This shift in foreign behavior has been one of the major technical reasons for the recent fall in the market. With global investors turning cautious across emerging markets, Indian equities experienced the impact in the form of persistent selling.

Impact of RBI’s Latest Policy Decision

The domestic policy backdrop added another layer of complexity. The Reserve Bank of India, in its December meeting, reduced the repo rate. This move is generally seen as supportive of long-term economic growth because borrowing becomes cheaper for companies.

However, stock markets often react differently in the short term. A rate cut requires investors to rethink expectations about corporate margins, future earnings, and the broader interest-rate outlook. Because global rates remain uncertain, markets showed hesitation even though the policy supports long-term credit expansion. Large banks and financial institutions acknowledged that the cut could boost loan demand, but equity investors continued to behave cautiously throughout the day.

Agriculture and Export Stocks Face Fresh Pressure

Agriculture-related exporters saw sudden weakness after reports of possible US tariffs on certain categories of Indian rice. This development caused strong declines in rice-linked companies, which fell more sharply than the overall market.

Export-dependent stocks tend to react faster to any news connected with overseas pricing or policy. Even small tariff adjustments can reduce profit margins, and this concern pulled down several agriculture-sector names. Consumer and retail stocks also moved unevenly as growth expectations were adjusted based on new macroeconomic signals.

Company News and Ongoing IPO Rush Shape Market Activity

The day also included a mix of corporate-specific triggers that created both gainers and losers. Some mid-cap education and technology companies posted encouraging quarterly results, helping them outperform the market. On the other hand, a few stocks that had risen strongly in previous months saw heavy profit-booking.

The IPO market remained active, drawing significant investor attention. Several new issues are scheduled to open soon, and this has diverted liquidity from secondary markets. When funds move into primary issues, trading volumes in existing listed stocks often decline, adding to short-term volatility.

Technical Indicators Reflect Growing Nervousness

Major indices slipped below key short-term support levels that traders have been watching for several sessions. Volatility also increased, as seen in option-pricing behavior. Many market participants bought protective puts at lower strike prices, signalling fear of further declines.

The market now sits at a point where long-term investors may find value in select stocks after the pullback, while short-term traders remain focused on downside protection. The clash between fear of near-term volatility and faith in long-term economic growth continues to shape market sentiment.

What Will Drive Markets in the Coming Sessions

Several important triggers will influence the movement of Indian indices over the next few days. The US Federal Reserve’s policy decision remains the most important global factor, as any unexpected guidance could move markets sharply. Updates on US–India trade discussions, especially concerning agricultural exports, will also remain under close watch.

Foreign investor flows will be another critical element. If FII selling continues at the current pace, markets may struggle to stabilize. Domestic economic data, upcoming corporate earnings, and performance of newly listed IPOs will further determine how Indian equities behave in the short term.

Overall Market View

The session reflected a mix of global uncertainty, domestic policy changes, and sector-specific risks. Increased volatility and broad sectoral losses highlighted the cautious attitude of investors. While the RBI’s rate cut supports long-term growth, its immediate effect on stocks remains neutral due to competing global pressures.

The stock market appears to be in a consolidation phase where traders are adjusting to new global signals while reassessing sector opportunities. Long-term fundamentals for India remain strong, but short-term movements are likely to stay sensitive to foreign flows and policy announcements.