The Indian stock market is set to open lower on Tuesday, as investors turn cautious ahead of the US Federal Reserve’s policy decision scheduled for tomorrow. Gift Nifty hovered around the 25,958 level, indicating a downside of nearly 0.3%.

Asian equities also traded weakly, with investors growing uneasy about how aggressively the Federal Reserve may ease policy beyond this week’s widely anticipated rate cut. While markets expect a reduction in interest rates, some strategists caution that sharp divisions within the Fed’s committee could add to market uncertainty.

Domestically, Indian equities saw heavy selling on Monday, December 8, as benchmarks declined across sectors amid mixed global cues. The broad sell-off wiped out over Rs 7 lakh crore in a single session, dragging the total market capitalisation of BSE-listed companies down to around Rs 463.6 lakh crore from Rs 471 lakh crore in the previous session.

Domestic Market Recap

On Monday, Indian indices closed in the red:

• Sensex slumped by 610 points (0.71%) to close at 85,102.69
• Nifty 50 moved down by 226 points (0.86%) to settle at 25,960.55

Gift Nifty

Gift Nifty was trading near 25,958, around 82 points lower than the previous Nifty futures close, hinting at a negative start for Indian markets.

Overnight Wall Street Performance

Wall Street’s key indices closed lower on Monday as losses spread across most S&P 500 sectors, while rising Treasury yields prompted investors to position cautiously ahead of the Federal Reserve’s monetary policy decision due in two days.

• The Dow Jones Industrial Average slumped by 215.67 points (0.45%) to close at 47,739.32.
• S&P 500 down by 23.89 points (0.35%), ending at 6,846.51.
• The Nasdaq Composite was lower by 32.22 points (0.14%), finishing at 23,545.90.

Crude Oil Prices

Oil prices steadied after recent losses, as markets assessed signs of an oversupply. WTI held near $59 per barrel, while Brent stayed above $62, ahead of key outlook reports from the EIA, IEA, and OPEC, which may confirm production continuing to outpace demand.

Gold Prices

Gold traded flat as investors shifted focus from the near-certain US rate cut to 2026 policy guidance. Spot gold hovered near $4,193 per ounce, while silver dipped 0.1% to $58.10. Rising Treasury yields capped upside momentum.

Overnight Major Global Events Driving Sentiment

1. US Federal Reserve Policy: Markets are bracing for the US Federal Reserve’s decision on Wednesday, with a 25 bps rate cut priced in at 87.4% probability, according to CME FedWatch. However, analysts warn of internal divisions within the FOMC, raising the possibility of one of the most split decisions in years and signalling a potentially shallow easing cycle ahead.
2. Japan Bond Yields: Japan’s bond yields stayed elevated near multi-year highs. The 5-year JGB yield held at 1.445%, near its highest since 2008, while the 10-year yield hovered at 1.965%, close to an 18-year peak, as investors priced in higher odds of a Bank of Japan rate hike amid supply concerns and post-earthquake uncertainty.
3. Nvidia China Sales Approval: US President Donald Trump approved Nvidia’s H200 AI chip exports to China, imposing a 25% surcharge and limiting sales to approved buyers. The move may unlock billions in potential revenue, and Trump indicated similar approvals could extend to Intel and AMD.
4. UK Retail Sales: UK retail sales growth weakened in November despite Black Friday discounts. Total sales rose just 1.4% YoY, the slowest since May and below the annual average, as consumer confidence softened following the Labour government’s budget, dragging demand for apparel and footwear.
5. US Dollar & Treasury Yields: The US dollar and Treasury yields climbed ahead of the Fed meeting. The 10-year yield touched its highest level since September, supporting the dollar against major currencies, including the yen, as global bond sell-offs extended across Europe and Japan.

Ready to invest like a pro? Unicorn Signals app equips you with 100+ Free tools and knowledge you need to succeed. Download the Unicorn Signals app and gain access to daily stock lists and insightful market analysis and much more!