Markets under pressure ahead of the FOMC outcome, Sensex sheds 2,000 points in three sessions

The street expects the Federal Reserve to slash the benchmark interest rate by 25 basis points (bps) this time after slashing it to 4.50 – 4.75 per cent in November. The last policy outcome came after Republican candidate Donald Trump secured a landslide victory in the Presidential elections.

However, any hawkish tone regarding future rate cuts, especially after a rise in November inflation, may hamper investor sentiments globally. Consumer inflation in the US rose to 2.7 per cent last month, higher than the Fed’s goal of bringing it down to a 2 per cent annual rate. Following this, few experts believe a slower pace of cuts in 2025. Add to it, President-elect Trump’s proposed economic policies may further add to inflationary pressure.

Except for the Nifty pharma index (up 1 per cent), all other sectoral indices ended in the red with auto, energy, PSU Bank, metal, media and realty falling between 0.5 per cent and 2 per cent.

In the Nifty50 pack, Trent, Dr Reddy’s Labs, Cipla, Wipro and Bajaj Auto were top gainers. Tata Motors fell 3 per cent and the other major laggards were Bharat Electronics, Power Grid Corp, JSW Steel and NTPC. In the broader market, BSE Midcap and Smallcap indices shed 0.5 per cent each.