Sensex Drops Over 500 Points; Nifty Ends Below 25,600

(RTTNews) - Indian shares ended Tuesday's session lower after three top Federal Reserve officials pushed back against expectations of another interest rate cut in December.

Sustained FII selling due to lack of clarity around U.S.-India trade talks also weighed on markets.

It is feared that the proposed U.S. Halting International Relocation of Employment (HIRE) Act, which will put tariffs on outsourcing services, is a greater threat to the Indian economy than the recent hike in H-1B visa fees.

The U.S. HIRE Act proposes a 25 percent tax on outsourcing payments, potentially impacting India's IT sector.

The benchmark BSE Sensex fell 519.34 points, or 0.62 percent, to 83,459.15 in cautious trade while the broader NSE Nifty index settled 165.70 points, or 0.64 percent, lower at 25,597.65.

The BSE mid-cap and small-cap indexes dropped 0.3 percent and 0.7 percent, respectively ahead of a public holiday for markets on Wednesday in observance of Guru Nanak Jayanti.

The market breadth was weak on the BSE, with 2,541 shares falling while 1,617 shares rose and 171 shares closed unchanged.

Among the prominent decliners, BEL, Maruti Suzuki India, Tata Steel, TMPV, Eternal and Power Grid Corp shares fell 2-3 percent.

Globally, Asian markets ended lower and European stocks opened on a sluggish note as a tech rally fizzled out due to valuation concerns and investors weighed mixed messages from Federal Reserve officials over the path of interest rates.

Gold traded below $4,000 an ounce on hawkish comments from Fed officials. The dollar index held near three-month highs on risk-aversion, sending gold prices below $4,000 an ounce.

Oil prices edged lower after four days of gains, as oversupply concerns persisted despite OPEC+'s decision to pause output hikes early next year.