• The Indian stock market saw a downturn across various sectors ahead of key policy decisions from the US Federal Reserve.
• Market experts note a sense of pessimism, with the market factoring in a 25 bps cut from the US Fed.
• The rupee traded flat near 84.90, with its range anticipated between 84.75 and 85.05.
• The market's future performance will be influenced by global policy decisions and the rupee's performance.

The Indian stock market experienced a downturn on Tuesday, with selling observed across various sectors, including PSU bank, auto, IT, financial service, pharma, FMCG, metal, and realty sectors of Nifty. This downturn comes ahead of key policy decisions, particularly from the US Federal Reserve. The Sensex settled at 80,684.4, down by 1,064.12 points or 1.30 per cent, and Nifty ended at 24,336, down by 332.25 points, or 1.35 per cent.

Market experts have noted a prevailing sense of pessimism across all sectors in anticipation of these policy decisions from the US Fed, Bank of Japan, and Bank of England. The market has already factored in a 25 bps cut from the US Fed, but remains vigilant for any hawkish signals. The Nifty Bank ended at 52,834.80, down by 746.55 points, or 1.39 per cent. The Nifty Midcap 100 index closed at 59,101.90 after dropping 341.15 points, or 0.57 per cent, and the Nifty Smallcap 100 index closed at 19,398.45 after dropping 132.60 points or 0.68 per cent.

On the Bombay Stock Exchange (BSE), 1,578 shares ended in green and 2,440 in red, with no change in 89 shares. On the sectoral front, buying was seen in the media sector of Nifty. In the Sensex pack, Bharti Airtel, IndusInd Bank, JSW Steel, TCS, Asian Paints, L&T, Bajaj Finserv, Reliance, Nestle India, HDFC Bank, Maruti, M&M, Tata Steel, and Power Grid were the top losers. Only ITC was among the top gainers.

Global Impact and Rupee Performance

The rupee traded flat near 84.90 as markets remain focused on the Fed's final policy decision of the year scheduled for December 18. A dovish tone could push the dollar index lower, providing relief for the rupee. However, any uncertain or hawkish remarks may strengthen the dollar and keep participants bearish on the rupee. The rupee's range is anticipated between 84.75 and 85.05, said Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities.

The Indian stock market indices Sensex and Nifty slumped over 1% on Tuesday, driven by widespread selling as investors await the US Fed's interest rate decision. Key laggards include Bharti Airtel, IndusInd Bank, and JSW Steel. European markets were mostly trading in negative territory. Wall Street ended mostly higher on Monday. Concurrently, the rupee has depreciated to an all-time low, and a record-high trade deficit is exacerbating the pressure, Vinod Nair, Head of Research, Geojit Financial Services, said. Foreign Institutional Investors (FIIs) offloaded equities worth Rs 278.70 crore on Monday, according to exchange data. Global oil benchmark Brent crude declined 0.50 per cent to USD 73.58 a barrel.

Market Trends and Future Predictions

The rupee's range is anticipated between 84.75 and 85.05, said Jateen Trivedi, vice president, research analyst-commodity and currency, LKP Securities. A long bear candle was formed on the daily chart, that has almost erased the gains made on Friday. Technically this market action is indicating a lack of strength to sustain the upside bounce.

The positive chart pattern like higher tops and bottoms is still intact as per daily chart and the lower support of 24200-24000 is going to be crucial. If Nifty manages to hold above 24200-24000 levels in the next few sessions, then there is a possibility of a sizable upside bounce in the market. Any failure to hold on a said support could possibly bring intense selling pressure in the market. Immediate resistance is at 24500 levels.

The Indian stock market witnessed a sharp rebound despite volatility and logged its fourth consecutive weekly gain - the longest such streak since July end, driven by a combination of improving global and domestic sentiments. Domestic benchmark indices Sensex and Nifty 50 experienced a smart turnaround in the previous session propelled by bargain hunting in telecommunication, tech and consumer durable stocks amid encouraging domestic retail inflation data, which bolstered investor sentiment.