Indian Markets Slide for Second Straight Session; Rupee Hits Record Low Against Dollar

Indian equity markets extended their losing streak for the second consecutive day on Tuesday, weighed down by sustained foreign fund outflows, a sharply weaker rupee, and global uncertainties. Both benchmark indices—the Sensex and the Nifty 50—ended firmly in the red, while the rupee slipped to an all-time low against the US dollar.

Sensex, Nifty End Lower

The BSE Sensex fell 533 points, or 0.63%, to close at 84,679.86, while the NSE Nifty 50 declined 167 points, or 0.64%, to settle at 25,860.10. Market sentiment remained cautious amid concerns over global trade dynamics and currency volatility.

Among Sensex constituents, Axis Bank, Eternal, HCL Technologies, Tata Steel, and Bajaj Finserv were the top laggards, registering losses between 2% and 5%. Axis Bank tumbled nearly 5% after brokerage firm Citi warned that pressure on net interest margins could persist in the December quarter. The stock emerged as the biggest drag on the Nifty, pushing the financials index down 0.8% and the private bank index lower by 1.2%.

Broader markets also remained under pressure, with the midcap index slipping 0.8% and the smallcap index falling 0.9%, reflecting risk aversion among investors.

Why Are Markets Falling?

According to Vinod Nair, Head of Research at Geojit Investments, the continued weakness in the rupee, sustained foreign portfolio investor (FPI) selling, and fragile global sentiment dragged domestic equities lower. He noted that smallcap and midcap stocks underperformed largecaps, while sectors such as IT, metals, banking, and real estate witnessed the sharpest declines. Consumption-related stocks provided limited support.

Nair added that volatility is likely to persist due to uncertainty around currency movements and foreign investment flows. Progress on a potential India–US trade agreement and stabilization of the rupee could act as near-term triggers, while softer commodity prices and expectations of better earnings may offer medium-term support.

Global Markets Remain Weak

Global markets also traded lower on Tuesday. Asian equities declined, while the US dollar hovered near a two-month low as investors awaited key US economic data, particularly jobs numbers that could influence the Federal Reserve’s policy outlook.

The risk-off sentiment impacted multiple asset classes. Bitcoin slipped 0.3% to $86,017.67, marking its lowest level in nearly two weeks. Nasdaq futures fell 0.8%, while European equity futures declined 0.5%. In Asia, technology stocks bore the brunt of selling—South Korea’s Kospi dropped 1.8%, Taiwan’s benchmark index fell 0.8%, and Hong Kong’s Hang Seng Tech Index slid 2.7%. The MSCI Asia-Pacific index (excluding Japan) declined 1.45%, touching a three-week low.

Commodities Under Pressure

Gold prices also retreated, falling nearly 0.6% to $4,275.41 per ounce, slipping from last week’s eight-week high. Crude oil prices continued to decline amid expectations of easing supply constraints driven by potential progress toward a Russia–Ukraine peace agreement. Brent crude futures fell 1.5% to $59.67 per barrel, while US West Texas Intermediate (WTI) crude dropped 1.6% to $55.90 per barrel, both hovering near their lowest levels since May.

Rupee Hits Record Low

The Indian rupee weakened to a record low of 91.0750 per dollar during the session before closing at 91.0275, down about 0.3%. The currency came under pressure from weak risk appetite, sustained hedging demand, and continued FPI outflows, compounded by uncertainty surrounding a potential US–China trade deal.

So far this year, the rupee has depreciated more than 6% against the dollar, making it one of the worst-performing emerging market currencies in 2025. Meanwhile, the dollar index, which tracks the greenback against six major currencies, stood at 98.20, hovering near its weakest level since mid-October.

Overall, markets remain cautious as investors brace for continued volatility driven by global economic cues, currency movements, and foreign capital flows.