Markets Slip as Sensex Falls 600 Points, Nifty Below 25,900 Amid Fed Rate Cut Concerns

Sensex Declines 600 Points, Nifty Below 25,900 as December Fed’s Rate Cut Doubts Weigh on Sentiment

Mumbai, October 30, 2025: Indian equity markets slipped sharply on Thursday, with both Sensex and Nifty ending lower as investor sentiment soured amid renewed global uncertainty. The lack of clarity on the US Federal Reserve’s next move on interest rates and persistent foreign fund outflows dragged benchmarks into the red.

At 1:30 p.m., the BSE Sensex declined by 590.57 points, or 0.69%, to 84,406.56, while the NSE Nifty 50 dropped 178.60 points, or 0.69%, to 25,875.30. The market weakness was broad-based, with heavyweights such as Dr. Reddy’s Laboratories, HDFC Life, Sun Pharma, Bharti Airtel, and Tata Steel emerging as top laggards — falling up to 5%.

Fed’s Cautious Tone Triggers Global Risk-Off Mood

Investor sentiment across global markets turned cautious after the US Federal Reserve opted to cut its key interest rate by 25 basis points overnight — a move that was largely expected. However, what unsettled markets was the Fed Chair Jerome Powell’s cautious stance, signaling that further rate cuts may not be imminent.

Powell cited limited economic data availability amid the ongoing US government shutdown, emphasizing that “future decisions will be data-driven.” His remarks effectively lowered expectations of another rate cut in December, dampening hopes of sustained monetary easing.

Ross Maxwell, Global Strategy Lead at VT Markets, commented that Powell’s tone was “more restrained than markets expected,” noting that “stocks and bond prices fell, while yields moved higher.” He added that the Fed’s emphasis on caution — amid rising “downside risks to employment” and “sticky inflation” — signaled a more conservative approach going forward.

“While the Fed has initiated easing, it is proceeding with significant caution. This could increase volatility in equities and drive yields higher if the market reduces expectations of deeper cuts,” Maxwell noted.

The prospect of fewer rate cuts and a prolonged period of policy uncertainty weighed on emerging market equities, including India, which saw renewed selling pressure from foreign investors.

Also Read : Fintech Body Flags UPI Concentration as 80% of Transactions Dominated by Two Apps

FIIs Turn Aggressive Sellers in Indian Markets

Adding to the bearish tone, foreign institutional investors (FIIs) turned net sellers in the Indian equity market, offloading shares worth ₹2,540.16 crore on Wednesday. The continued FII outflows, after weeks of intermittent buying, indicate caution among global investors amid tightening global liquidity conditions and uncertainty over US interest rates.

Market analysts suggest that the risk-off sentiment triggered by the Fed’s cautious stance and rising bond yields in developed markets could continue to exert short-term pressure on Indian equities.

“Foreign investors are adopting a wait-and-watch approach until there’s more clarity from the Fed and domestic inflation prints. The rupee’s recent weakness against the dollar has also made foreign inflows less attractive,” said a Mumbai-based fund manager.

Volatility Returns as India VIX Rises

As global uncertainty builds, domestic volatility indicators have begun flashing signs of nervousness. The India VIX, which measures market volatility, rose 1.5% to 12.16, reflecting growing unease among traders.

Higher volatility typically signals that investors are hedging their portfolios amid fears of short-term market corrections. Market experts believe that the next few sessions could remain choppy as investors reassess their expectations for both global and domestic monetary policy trajectories.

Technical Outlook: Buying Interest May Emerge at Lower Levels

Despite the day’s weakness, technical analysts remain cautiously optimistic about medium-term trends. Anand James, Chief Market Strategist at Geojit Financial Services, noted that while the Nifty has lost some momentum near recent peaks, bullish continuation patterns are still intact.

“Nifty’s momentum has slowed near its recent highs, with oscillators showing hesitation. However, dips towards 25,990 are expected to attract buying interest, while immediate support lies near 25,886,” James said.

He added that unless Nifty decisively breaks below these support zones, the index could see a rebound in the coming sessions as domestic institutional investors step in to absorb selling pressure.

Sectoral Snapshot: Pharma, Life Insurance, and Metals Drag

Most sectors traded in the red, with pharmaceuticals, metals, and insurance stocks witnessing the sharpest declines. Dr. Reddy’s Laboratories and Sun Pharma slipped amid profit booking after recent gains, while HDFC Life Insurance saw pressure following weak quarterly performance.

Tata Steel also fell as global commodity prices softened, while Bharti Airtel declined amid concerns over rising competition in the telecom space. On the other hand, select IT and FMCG stocks offered mild support, benefiting from the rupee’s depreciation and defensive positioning.

Outlook: Markets Eye Domestic Triggers and Fed Commentary

With global cues dominating sentiment, market participants are now awaiting domestic macro indicators and corporate earnings for direction. The focus remains on upcoming GDP data, October auto sales, and any further statements from the US Federal Reserve.

Analysts say a sustained break below 25,850 on Nifty could open the door to deeper corrections, while a rebound above 26,100 could signal renewed strength. Investors are advised to remain cautious, maintain stock-specific exposure, and avoid aggressive leveraged positions amid the global uncertainty.

• Nifty 50
• Bank Nifty
• Sensex