Indian stock markets fell for the second straight day on Tuesday as IT stocks came under pressure. Investors stayed cautious ahead of the U.S. Federal Reserve’s interest rate decision, while uncertainty around a possible U.S.–India trade deal also affected market mood.
The Nifty 50 slipped 0.47% to 25,839.65, and the Sensex dropped 0.51% to 84,666.28. Both major indexes have now lost around 1.2% this week and remain nearly 1.8% below the record highs they touched earlier in the month.
Market experts say the recent weakness is mainly due to a lack of fresh positive triggers. According to analysts, investors seem tired as markets failed to hold on to their all-time highs. Many traders are now waiting for clear signals from global events before making new moves.
IT companies were the biggest drag on the markets, falling about 1.2%. These firms earn a large share of their revenue from the United States, so any uncertainty around U.S. interest rates or economic conditions directly affects them. The upcoming Fed meeting kept investors on edge, as policy decisions there often influence global markets.
Out of 16 major sectors, 11 closed lower. However, small-cap and mid-cap stocks managed to bounce back, rising 1.1% and 0.3% respectively, after suffering sharp losses in the previous session.
The Federal Reserve is widely expected to cut rates on Wednesday. Still, major Wall Street banks believe there might be fewer rate cuts in 2026 because of concerns over inflation and expectations that the U.S. economy will remain strong. Higher U.S. interest rates usually strengthen the dollar and increase Treasury yields, which can reduce foreign investment in emerging markets like India.
On the trade front, U.S. Treasury Secretary Scott Bessent said that discussions with India were continuing. A senior U.S. trade representative is expected to visit India soon. This comes as reports suggest the U.S. may impose tariffs on rice imported from India, adding another layer of uncertainty.
In stock-specific news, SpiceJet rose 5.6%, marking its third straight gain, helped by ongoing operational issues at its competitor IndiGo. Meanwhile, IndiGo shares climbed nearly 1% after the airline’s CEO said that its operations were now fully stable.
Kaynes Technology saw a big jump of 13.8% after major global banks repeated their positive outlook on the company, helping it break a four-day losing streak.
Overall, markets remain cautious as investors closely watch global cues that could influence the next big move.
