On Wednesday, domestic equity indices closed in negative territory, with the Sensex dropping by 398 points or 0.49%, settling at 81,523.16. The Nifty also slipped 122.65 points or 0.49%, closing at 24,918.45, marking a decline of over 550 points from its intraday high.

Market breadth was weak, with 1,619 advancing stocks compared to 2,345 declining, while 106 remained unchanged. Investors largely remained cautious, awaiting crucial U.S. Consumer Price Inflation (CPI) data later in the day, which is expected to influence the Federal Reserve's upcoming rate decision.

Pharma and FMCG stocks were the only sectors to resist the broader market downtrend.

However, other key sectors in the Nifty, including energy, PSU banks, realty, and automobiles, faced significant losses. Consumer durables and FMCG stocks were the only bright spots in a sea of red.

Top Gainers and Losers:
Among the top gainers, Bajaj Auto surged 3.94%, reaching an all-time high of ₹11,420.75. Asian Paints followed with a 2.20% increase, closing at ₹3,367.45, while Bajaj Finance gained 1.43%, ending the day at ₹7,345.55. Tata Motors led the losers' pack, dropping 5.74% to ₹976.30 after the company announced a price reduction for its electric vehicles and other popular models indicating weak sales expectations. ONGC also saw a 3.48% decline, closing at ₹285.30.

In  Europe, the FTSE remained in the red, while the DAX posted gains. Across Asia, major indices like the Nikkei, Hang Seng, and KOSPI also closed lower. Japan's Nikkei 225 shed 539 points or 1.51%, while the Hang Seng dropped 125.38 points or 0.73%, ending at 17,108.71.

South Korea's KOSPI closed 10 points or 0.40% lower at 2,513.37. Asian markets, including India's benchmark indices, were dragged down by global cues amid ongoing uncertainty surrounding the Federal Reserve's rate cut decisions. Investors are closely watching for U.S. CPI data, which could further impact market sentiment.

Rising crude oil prices, up by 2.70%, provided a positive counterbalance.

The much-anticipated U.S. CPI data for August, expected to be released by the Labor Department's Bureau of Labor Statistics later today, will play a critical role in shaping the Fed's policy decisions next week. The producer price index report is set to follow on Thursday. Analysts are predicting a slight uptick in U.S. inflation, while domestic inflation is expected to remain stable.

A better-than-expected U.S. inflation report, along with the rising trend in global crude prices, may positively influence the Fed's rate cut decision. A favorable outcome could provide some relief to global markets, including India, when they open for trade tomorrow.