This triggered an Indian stock market crash wherein noons experienced a sharp fall as both benchmark indices Sensex and Nifty dropped by over 1 per cent. This slide in the domestic market has been seen against the background of the caution displayed by investors because of the US Federal Reserve's meeting on December 18.
On the other hand, the poor performance of big stocks also pulled down market indices.
At 1.23 pm, the Sensex traded at 80,747.04 as it slipped by 1,001.53 points, or 1.23%, and the Nifty at 24,364.70 fell 303.55 points, or 1.23%.
According to market experts, worldwide markets would look forward to the FOMC outcome on Wednesday. The market has already discounted a 25bp rate cut, hence, the focus will be on the Fed chief's commentary, said market experts. Anything that deviates from the dovish commentary will be a negative from the market point of view, they said.
"This is only a remote possibility. The US services PMI coming strong at 58.5 per cent indicates a resilient economy, which augurs well for the market," they added.
In the Sensex pack, Bharti Airtel (NS:BRTI), TCS (NS:TCS), L&T, Power Grid (NS:PGRD), Bajaj Finserv (NS:BJFS), Reliance (NS:RELI), and JSW Steel (NS:JSTL) were the major losers. ITC (NS:ITC), Adani Ports, Tata Motors (NS:TAMO), and Hindustan Unilever (NS:HLL) Ltd were the major gainers.
Midcap and smallcap stocks fared marginally better despite the decline in key indices.
Nifty Bank declined by 604.45 points or 1.13 percent to 52,976.90. The Nifty Midcap 100 index traded higher by 82.30 points or 0.14 percent at 59,360.75. Nifty Smallcap 100 declined by 20.20 points or 0.10 percent at 19,510.85.
Akshay Chinchalkar of Axis Securities said, "The Nifty has retraced a part of the Friday short squeeze and formed a 'bearish harami' formation. That means which one of yesterday's high or low breaks first will decide the next tactical move."
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