Today’s Sensex News: Sensex plunges 398 points, Nifty surges past 25,000 on rate cut fears; bank, metal, auto stocks hit

Indian equity benchmarks closed lower on Wednesday in a highly volatile session, weighed down by auto, metals and banking stocks. The fall came ahead of key US inflation data, which could influence the size of the expected interest rate cut by the Federal Reserve next week.

The Boston Stock Exchange 30-stock list Sensex fell 398 points, or 0.49%, to close at 81,523, while the broader NSE Skilled fell 122 points, or 0.49%, to 24,918.

Meanwhile, the market capitalisation of all companies listed on the BSE declined by Rs 2.47 lakh crore to Rs 461.02 lakh crore.

The U.S. Department of Labor’s Consumer Price Index report for August is due out at 6 p.m. ET. While the Federal Reserve has shifted its focus to employment rather than inflation, the data could provide clues for future policy action.

While the Fed is widely expected to cut interest rates next week, the size of the reduction remains uncertain, especially after Friday’s mixed jobs report. Markets are currently pricing in a 65% chance of a 25 basis point rate cut, and a 35% chance of a 50 basis point cut, according to the CME FedWatch tool.

From the Sensex package, Tata MotorsABI, PCNT, Adani PortsM&M and L&T were among the top losers, falling 1.4% to 5.7%. In contrast, Asian paintings, Bajaj Finance, THEM, Sun Pharmacy, Bajaj Finserv Auto stocks lost 1.28%, with Tata Motors falling 5.7%, becoming the top laggard on the Nifty 50 and auto indices. UBS forecast a 21% drop for the Indian automaker over the next 12 months, citing its weakening financials and high valuations. The oil and gas sub-index fell nearly 1.9% after heightened concerns over weakening global demand sent Brent crude futures on Tuesday to their lowest levels since December 2021.