India's benchmark indices Sensex and Nifty recorded their steepest weekly declines in over two years, dropping more than 5 percent each amid global market volatility that weighed heavily on investor sentiment.


On December 20, the Sensex closed near the 78,000 mark, shedding 1.5 percent from the previous session, while the Nifty fell below 23,600, also down 1.5 percent. This marked their sharpest weekly loss since June 2022.

The selloff was triggered by the US Federal Reserve's cautious stance on rate cuts. The Fed revised its forecast to just two rate cuts in 2025, down from an earlier projection of four, unsettling markets globally.

European markets also felt the impact, with the Stoxx 600 slipping 1 percent, putting it on track for its worst week in three months. Asian equities faced similar pressures, with a key regional index dropping for a sixth consecutive day, its longest losing streak since April. In the US, S&P 500 and Nasdaq 100 futures fell 0.8 percent and 1.2 percent, respectively, extending losses following Wednesday's selloff.

Market focus now turns to the upcoming US personal consumption expenditures (PCE) data for November, a key measure of inflation closely watched by the Fed.

Meanwhile, fears of a looming US government shutdown have intensified after the Republican-led House rejected a temporary funding plan supported by President-elect Donald Trump, with the shutdown deadline less than 24 hours away.

With today's fall, the Sensex shed 5 percent for the week, plummeting over 1,000 points for three out of the five sessions. As a result of the relentless fall, around Rs 17 lakh crore worth of market cap was wiped out of BSE-listed firms.

On the other hand, the Nifty 50 which also happened to drop around 5 percent this week, slipped below its 200-day exponential moving average (DEMA) to fall back into the correction territory. This means that the Nifty 50 is now down over 10 percent off its record high.

On December 20, marking the end of the week, the Nifty closed at a one-month low of 23,587.50, with a cut of 1.5 percent while the Sensex also lost 1.5 percent to close at 78,041.59. The broader market sentiment also tilted towards laggards as 2,859 shares fell, while just 963 ended higher and 95 remained unchanged.


Tacking the selloff in the broader market, the Nifty Midcap 100 plunged 2.8 percent and the Nifty Smallcap 100 was down 2.2 percent. With this, the Nifty Midcap 100 and Smallcap 100 indices continued its downward journey for the fourth day on the trot.  For the week, both the indices were down around 3.5 percent each.

Apart from these, all the sectoral indices ended in the red today with the Nifty Reality, Nifty PSU Banks, and Nifty IT falling the most. The Nifty Bank index also dropped 1.5 percent today which took its weekly fall to 5.3 percent.