Benchmark indices Sensex and Nifty slumped in early trade on Thursday following weak global market trends after the US Federal Reserve indicated fewer rate cuts next year.
The 30-share BSE benchmark Sensex tanked 1,162.12 points to 79,020.08 in early trade. The NSE Nifty tumbled 328.55 points to 23,870.30.
All the 30 blue-chip stocks were trading lower. Infosys, State Bank of India, Tata Steel, Asian Paints, JSW Steel, Bajaj Finserv, Bajaj Finance and Mahindra & Mahindra were the biggest laggards.
In Asian markets, Seoul, Tokyo, Shanghai and Hong Kong were trading lower.
Wall Street ended sharply lower on Wednesday.
"When valuations are high the market needs only a trigger to correct sharply. This trigger was provided by the Fed guidance of fewer rate cuts in 2025, which went against market expectations. Even though the rate cut of 25 bps was in tune with the market’s expectation, the indication of only two cuts of 25 bps each in 2025 against market expectation of three or even four cuts spooked the market resulting in a sharp sell-off in Wall Street.
"The Fed chief’s comments regarding the economy and the labour market are, in fact, positive, suggesting a resilient US economy. But always the market gets spooked when the reality falls short of expectations," V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 1,316.81 crore on Wednesday, according to exchange data.
"The Federal Reserve cut its benchmark interest rate by 25 basis points, marking the third consecutive reduction this year, but bullish sentiment waned as the Fed lowered its 2025 projections to just two additional cuts," Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd, said.
Global oil benchmark Brent crude dipped 0.40 per cent to USD 73.10 a barrel.
The BSE benchmark Sensex tumbled 502.25 points or 0.62 per cent to settle at 80,182.20, taking its downtrend to the third day on Wednesday. The Nifty declined 137.15 points or 0.56 per cent to 24,198.85.
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