Markets closed sharply lower on Thursday as hawkish commentary from US Federal Reserve Chair Jerome Powell sparked a selloff, with the falling 592.67 points or 0.70 per cent to settle at 84,404.46 and the 50 declining 176.05 points or 0.68 per cent to 25,877.85. The primary trigger was Powell’s indication that there would be no definite commitment for a further rate cut in December, despite the Fed delivering an expected 25 basis point rate cut.
“The primary reason for the market’s downturn was global uncertainty triggered by the US Federal Reserve’s latest 25 basis point rate cut, accompanied by Fed Chair Jerome Powell’s remarks indicating no definite commitment for a further cut in December,” said Abhinav Tiwari, Research Analyst at Bonanza. The selling pressure was broad-based, with 2,291 stocks declining against 1,876 advances on the BSE.
Among the top losers on the Nifty 50, plunged 3.79 per cent to ₹1,203.50, fell 2.54 per cent to ₹1,541.00, declined 2.01 per cent to ₹746.00, IndiGo dropped 1.68 per cent to ₹5,715.50, and Bharti Airtel lost 1.50 per cent to ₹2,069.00. On the gainers’ side, Coal India rose 1.58 per cent to ₹388.05, Hindalco gained 0.79 per cent to ₹863.00, Larsen & Toubro advanced 0.79 per cent to ₹3,989.40, Bharat Electronics climbed 0.74 per cent to ₹410.20, and Nestle India edged up 0.55 per cent to ₹1,280.00.
“The market consolidated after Powell indicated that this might be the last rate cut of 2025, tempering hopes of further monetary easing. The resulting strength in the U.S. dollar contributed to a risk-off sentiment across emerging markets, including India,” said Vinod Nair, Head of Research at Geojit Investments Limited.
Sectoral performance was largely weak, with healthcare, financials, and pharma indices dropping around 0.7 per cent each. The Nifty Bank fell 0.61 per cent to 58,031.10 and Nifty Financial Services declined 0.77 per cent to 27,376.00. The broader markets showed resilience, with the Nifty Midcap 100 declining just 0.09 per cent to 60,096.25. Realty and Energy were the sole gainers, up 0.13 per cent and 0.04 per cent respectively.
Additional pressure came from renewed foreign institutional investor selling. “Investors also exercised caution after the US Fed chairman indicated that further rate cuts over next two months look unlikely. Traders are also cutting their positions awaiting trade deals between the US and China,” said Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd.
“Markets witnessed broad-based selling as uncertainty over the U.S. Federal Reserve’s future rate-cut trajectory outweighed earlier optimism. Meanwhile, a mild weakening of the rupee against the U.S. dollar added to the cautious undertone among investors,” said Ponmudi R, CEO of Enrich Money.
In commodities, gold prices traded volatile with mild gains at ₹1,21,130 per 10 grams, up 0.38 per cent. “Gold is expected to remain volatile within a range of ₹1,18,000–₹1,24,500 in the near term,” said Jateen Trivedi, VP Research Analyst at LKP Securities.
Looking ahead, market participants will closely monitor the outcome of the Trump-Xi meeting in South Korea. “Volatility could persist, any positive resolution in global trade or fiscal matters may help stabilize and revive market confidence in coming sessions,” Tiwari added.