Indian Markets Under Pressure: Nifty Falls Over 1%
The Indian markets faced intense pressure during Monday’s trade, with the Nifty 50 trading with cuts of more than 1%. Almost all sectors were trading in the red, with Nifty Realty falling almost 4%.
The pain was witnessed in the broader market as well, with Nifty Smallcap 250 trading with cuts of almost 2.5%. Nifty Midcap 150 was also down more than 1.5%.
Currency Depreciation: A Major Concern
Currency depreciation has been weighing on markets massively, especially with the rupee breaching past the 90 levels against the US dollar. Although the dollar index has been trending relatively weaker, rising concerns about inflation and sustained FII outflows, has kept the rupee above 90 levels – a key psychological marker.
For more information on the impact of currency depreciation on the Indian economy, visit our article on currency depreciation impact.
FII Outflows: A Cause for Concern
Foreign investors have remained in sell-off mode, offloading equities worth Rs 11,820 crore in the first week of December alone. In 2025 so far, FIIs have offloaded shares worth Rs 1,55,495 crore, as cautious sentiment continue to weigh on markets.
To understand the impact of FII outflows on the Indian stock market, read our article on FII outflows impact.
Liquidity Crunch: A Major Issue
Liquidity is being drained from the secondary market as massive funds are locked in primary market activities. The allotment for the Meesho IPO, which was subscribed 79 times, is scheduled for today, keeping substantial investor capital blocked.
Additionally, new issues like Wakefit and Corona Remedies opening for subscription today are further diverting retail and HNI liquidity away from listed stocks. For more information on the impact of IPOs on the stock market, visit our article on IPO impact on stock market.
Global Cautions: A Wait-and-Watch Approach
Global caution is elevated ahead of the US Federal Reserve’s crucial policy meeting scheduled for Dec. 9-10. With the rate decision due this midweek, investors are staying on the sidelines, anxious about the Fed’s forward guidance on interest rate cuts for 2026.
To stay updated on the latest developments in the global economy, read our article on global economy update.
India-US Trade Deal: A Pending Issue
India, till date, remains one of the few countries yet to reach a trade deal agreement with the United States under the leadership of Donald Trump. The relationship between the two countries hasn’t been helped by Russian President Vladimir Putin’s recent visit to India.
As the impasse continues, foreign investors are growing increasingly cautious about India. For more information on the impact of trade deals on the Indian economy, visit our article on trade deal impact on Indian economy.
Conclusion
In conclusion, the Indian markets are facing a perfect storm of challenges, including rupee depreciation, FII outflows, liquidity crunch, global caution, and pending trade deals. As investors, it’s essential to stay informed and adapt to the changing market conditions.
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