Markets Take a Sharp Hit as Fed Anxiety and FII Outflows Weigh on Sentiment

tock Market Falls as Fed Jitters Hit Investor Mood

Written by: Supriya Kadu

Edited by: Pinky Deshmukh

Last Updated: December 09, 2025

Summary: Sensex dropped over 610 points, and Nifty fell under 26,000, with widespread selling pressure across all sectors.

Global fears and foreign withdrawals frightened investors on Tuesday, sending both benchmark indices plummeting. At the end of the day, the Sensex dropped over 610 points to about 85,103, and the Nifty 50 fell under the 26,000 mark, finishing near 25,960.

The weakness was broad-based, with traders turning cautious ahead of the U.S. Federal Reserve’s upcoming policy decision. Interest rate uncertainty has further reduced risk appetite in unstable global markets.

Adding to the pressure, foreign investors continued withdrawing money from Indian equities. Their steady selling has been one of the biggest drags in recent weeks, tightening liquidity and making traders more defensive.

Most sectors felt the pinch. Metals, automobiles, financials, and large-cap heavyweights all fell sharply as investors took profits across the board. Mid- and small-cap stocks, which often stay up during volatile periods, also lost traction.

For the time being, the mood remains cautious. Markets are expected to remain sensitive to global cues, particularly Fed speech, dollar movement, and broader macro signs. If foreign flows don't level off or a good factor doesn't show up, trading sessions for investors could be more volatile.