Rupee at Lifetime Low, Sensex Slides: What’s Spooking Dalal Street Today

The Indian stock market turned out to be a much lower affair on Tuesday as negative forces mixing with all sectors went on to bring the market indices down along with the withdrawal of foreign fund investments and the weak signals from the overseas markets.

The opening of the trading was pretty much flat, and the losses increased considerably throughout the day. The BSE Sensex lost almost 500 points at its lowest point of the day, getting down to about 84,718. The NSE Nifty 50 also slipped under the 25,900 level, which was a clear indication of the investors going with the overall caution.

The blue-chip shares were mainly responsible for the bearish trend. The stocks of Axis Bank tumbled heavily after the bank changed the outlook for its margins, saying that net interest margins will now be at the lowest point later than what was previously mentioned. The two giants, Reliance Industries and Eternal also contributed to the downtrend, making the morning trade even heavier.

The situation was the same for all sectors as the indices started the day down. Hardly any sector was saved from red except for the non-cyclical consumer goods and IT ones. The impact on the broader market, though, was less severe, still small-cap stocks lost around 0.2% and mid-cap shares went down by almost 0.1%, which was not in line with the major indices.

The investors were alert as the market indicators have not shown much movement in the sideways direction for the last two weeks. The bullish run that took the indices to all-time highs on the 1st of December is over now, and the investors are reasoning the same with the lack of new triggers. The selling off of foreign institutional investor stocks and the uncertainty about India-US trade negotiations have continued to dampen the market's mood.

The very currency markets increased the jitters. The rupee went on declining even more in the first hours of trade, hitting a new all-time low of 90.82 against the dollar, indicating that it had been depreciating for four days in succession. The rupee fall has raised fears of imported inflation and less capital inflow in the near term.

Global signals hardly provided any solace. Asian stocks were down as the investors became more cautious before the release of major economic data from the US, including the jobs report that might influence the market’s perception of the Fed's policy path for 2026. The Japanese and South Korean indexes dropped more than 1%, while US and European equity futures suggested a soft start.

In the midst of a wider market sell-off, select stocks managed to go up in price. Meesho shares which had already gone up 13% in early trade, reached the 'happy' bump of its price, thus continue to ride on the momentum since its takeover on the bourse. The infrastructure sector was also given selective interest. SEPC shares surged after the company won a ₹269 crore subcontract related to a railway doubling project, while Ion Exchange India rose by approximately 8% due to its orders worth ₹205 crore in the water treatment sector.

Market analysts opined that the present situation is one of consolidation rather than a change in the trend. Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, remarked that the buying by domestic institutions has up till now taken care of the selling by foreigners while supporting the market in the course of declines. He pointed out that the reduction of pressure on trade deficit might facilitate the rupee’s stability and thus alleviate one of the concerns facing stocks.

Analysts, nevertheless, warned that consistent increase would be contingent on earnings growth. The December quarter results which are to be released soon are thought to give an indication of the sectors that are recovering, with the banking stocks expected to stay in the spotlight.

At this moment, traders are watching the 25,900 mark of Nifty as a short-term support area. Global signals are weak, the local currency is still not stable, and no clear picture regarding earnings is expected, so investors are ready for more ups and downs in the market during the following sessions.