Indian stocks experienced a substantial dive on Tuesday, largely due to the enduring strength of the American dollar and Treasury yields sitting at near four-month peaks, all in anticipation of the Wednesday's Federal Open Market Committee (FOMC) decisions on interest rates.
The U.S' central bank is widely expected to maintain its benchmark interest rate. However, the real interest lies in what the Federal officials will say regarding the possibility of reducing rates.
Rising inflation rates for both consumers and producers, higher than expected, have diminished the optimism previously held for a potential reduction in the Fed's initial rate in June.
Other elements also contributing to investor concern include rising oil prices due to indications of decreasing availability and fears surrounding the highly valued small- to mid-cap sectors.
The S&P BSE Sensex, a benchmark Indian index, saw a decrease of 736.37 points, or 1.01 percent, concluding the trading day at 72,012.05. Simultaneously, the broader NSE Nifty index also experienced a tumble, falling 238.25 points, or 1.08 percent, to a final count of 21,817.45.
Tata Consultancy Services (TCS) experienced a 4.4 percent fall, fueled by rumors that Tata Sons may be selling a minority stake in the company through a block deal.
Based on stock exchange data, approximately 2 crore shares, or around 0.6 percent equity of TCS, was sold via a block deal.
Meanwhile, IndusInd Bank, Britannia Industries, Cipla, and Bharat Petroleum Corporation Limited (BPCL) all experienced losses between 3 and 4 percent. On the other hand, Bajaj Finance and Bajaj Auto both saw over a 1 percent increase.
