Why Is Stock Market Falling Today? Key Factors Behind Sensex, Nifty Decline On December 9

Why is Indian Stock Market Falling Today? Indian equities extended their decline on Tuesday, with the Sensex and Nifty continuing the previous session’s sharp slide as caution prevailed ahead of the U.S. Federal Reserve’s rate decision and uncertainty surrounding a potential U.S.–India trade agreement.

The S&P BSE Sensex dropped 700 points to slip below 84,400, while the NSE Nifty 50 fell 200 points to trade under the 25,750 mark, as risk appetite remained subdued following their steepest fall in over two months.

Here are the key factors dragging markets lower:

1. Jitters ahead of the U.S. Fed decision Investors turned cautious ahead of the U.S. Federal Reserve’s policy announcement on December 10 — a meeting that has gained significance after weeks of shifting rate expectations. While a 25-basis-point

cut is broadly anticipated, retail investors have been trimming positions to hedge against the possibility of a surprise status quo, which could strengthen the dollar and worsen pressure on domestic equities already dealing with a weaker rupee and sustained foreign selling.

The anxiety was compounded by a heavy global central-bank calendar. The Reserve Bank of Australia, Swiss National Bank and Bank of Canada are all expected to hold rates steady, while the Fed is widely tipped to ease on Wednesday.

What lies ahead remains uncertain. Bond markets are now pricing in a shallower U.S. easing cycle, with several Wall Street banks forecasting fewer rate cuts in 2026 as stubborn inflation and resilient U.S. economic data reduce the scope for aggressive policy support.

2. Global markets under pressure
Weak sentiment across Asia added to the cautious mood in Indian equities. Investors stayed on the sidelines ahead of the expected U.S. rate cut and a week packed with central-bank decisions. The dollar stayed firm, and the yen held steady despite a strong earthquake in northeastern Japan that caused minimal disruption.

Regional trading remained muted with the RBA set to announce its policy outcome later today, followed by the SNB and BoC decisions this week — all expected to keep rates unchanged.

Bond traders have already begun pricing in a milder U.S. rate-cut trajectory for 2026 as inflation remains sticky and economic indicators stay strong. This backdrop weighed on equities, with MSCI’s Asia-Pacific ex-Japan index slipping 0.28%. The Nikkei edged down 0.08%, and South Korea’s Kospi dropped 0.58%.