Midday Market: Sensex slides over 900 points as Trump rally fades; Fed rate decision in focus

Indian stock markets saw a sharp decline in Thursday’s session as initial enthusiasm over Donald Trump’s recent US presidential election win faded, and investors shifted their focus to the upcoming US Federal Reserve rate decision. This led the benchmark BSE Sensex to plunge over 900 points, with the Nifty50 index also seeing a steep drop, trading just above 24,200 by mid-morning.

After a buoyant Wednesday that had markets rallying over one per cent, driven by post-election optimism, sentiment quickly soured as investors grew wary of potential shifts in US monetary policy. The anticipated Fed decision has heightened uncertainty around interest rate movements, adding pressure to the Indian market.

Key index heavyweights HDFC Bank, Reliance Industries, and ICICI Bank contributed significantly to Thursday's losses, with financial, metal and consumer durable sectors witnessing the steepest declines. Out of the Nifty50, only two stocks, Apollo Hospitals and Tata Steel, managed gains; Apollo hit an all-time high with a seven per cent rise following strong Q2 profits, while Tata Steel climbed on improved earnings.

Experts caution that while Trump’s win initially lifted global markets, including India’s, the reality of a high-interest rate environment in the US could limit the rally's longevity in Indian equities. The market outlook remains volatile as participants await clarity from the Fed on interest rates, a critical factor shaping near-term sentiment.