Nifty Sensex declines 2 percent in last four sessions, Fed rate cut hopes, Brent crude oil cut, broader market, January 13, 2025

Indian stocks continued their southward journey for the fourth straight session on Monday (Jan 13, 2025). Amid the ongoing rout, both major indices – Nifty and Sensex fell as much as 2 per cent.

At around 10:20 am, the 30-share BSE index trimmed some of its early losses and was down 0.63 per cent or 484.82 points at 76,894.09, while the Nifty50 was down 0.71 per cent or 165.4 points at 23,266.1.

Here are the possible reasons for today’s stock market decline:

Markets have tempered their expectations for a Fed rate cut this year:

After a stronger-than-expected payroll date was released over the weekend, market participants tempered their expectations for a Federal Reserve rate cut this year. Low rates in the US economy generally encourage capital flows to emerging market economies.

“The market will continue to come under pressure from several strong headwinds,” said Dr VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services. “Strong jobs data from the US with 2.56 lakh jobs created in December versus expectations of 1.65 lakh jobs means that the outlook Interest rate cuts in 2025 are now down to one, and with US unemployment down to 4.1%, the economy does not need any stimulus.

He added that this good economic news turned into bad news for markets that were ruling out many interest rate cuts this year.

High price of crude:

Brent crude prices surpassed $81 per barrel, hitting a three-month high in early trading on Monday. The rise in the commodity came amid expectations that the expanded US sanctions on Russian oil producers and 183 ships will lead to an interruption in Russian crude supplies to major importers China and India.

Broader market weakness

Indian stocks continue to feel the heat of the downside in broader markets. At the time of writing, the Nifty Midcap 100 index was down 1.52 per cent, while the Nifty Smallcap 100 index was trading 1.3 per cent lower.