Indian equity benchmarks opened lower on Tuesday, with investors booking profits after the strong gains seen in the previous session. The decline came despite improved sentiment over easing US–China trade tensions and stable domestic earnings. The 30-share BSE Sensex fell about 200 points in early trade, while the NSE Nifty slipped below the 25,900 mark.
Key reasons for the market decline
Market participants attributed the weakness to foreign fund outflows. Foreign Institutional Investors (FIIs) offloaded equities worth ₹55.58 crore on Monday, putting pressure on domestic markets as overseas selling typically weighs on sentiment and liquidity.
Profit-booking was evident across key sectors, including banking, financial services, realty, FMCG, and IT, leading to a broad-based decline.
The rupee depreciated 21 paise to ₹88.40 per US dollar, hit by higher dollar demand from importers and firm global crude oil prices. Traders said markets are closely watching the US Federal Reserve’s policy decision due Wednesday, with expectations of a 25-basis-point rate cut, and possibly another in December.
Volatility rises ahead of Nifty expiry
Market volatility increased as the India VIX rose 5% to 12.50, reflecting growing caution among traders. The session also coincided with the monthly expiry of Nifty derivatives contracts, typically a period of higher volatility as investors adjust positions.
Meanwhile, Brent crude, the global oil benchmark, traded 0.05% higher at $65.65 a barrel.
