Global markets started the week on a weak note as investors moved out of risk assets, even though December is normally a supportive month for equities. U.S. indices and the FTSE 100 both closed lower on Monday.

According to Devarsh Vakil, Head of Prime Research at HDFC Securities, the dip was driven mainly by a sharp rise in U.S. Treasury yields and continued pressure on the manufacturing sector from existing tariffs as markets await the U.S. Federal Reserve’s policy decision next week.

Fed rate cut expectations in focus

Recent dovish remarks from Federal Reserve officials had fueled optimism about a possible rate cut, and markets are currently pricing in an 87% probability of a 25 basis-point cut when the Fed concludes its meeting on December 10.

However, concerns about global monetary tightening re-emerged after the Bank of Japan hinted at a possible rate hike. Vakil noted that these hawkish signals from Japan have raised fears of an unwind of yen-funded carry trades adding to selling pressure in crypto and growth stocks.

Crypto market suffers sharp declines

Bitcoin dropped nearly 6%, briefly falling below $85,000, as risk aversion hit digital assets. Crypto-linked stocks also slipped, with Coinbase down 4.8% and U.S.-listed Bitfarms down 5.7%.

The broader crypto market has now lost over $1 trillion in value since hitting its record high of around $4.3 trillion.

Commodities: Oil, gold and silver gain

Oil prices continued to rise for a second straight session on Tuesday, supported by geopolitical concerns including Ukrainian drone strikes on Russian energy infrastructure and rising U.S.–Venezuela tensions.

Gold pushed back above $4,200/oz, while silver touched fresh record levels near $58, boosted by aggressive expectations of December rate cuts and tight physical supply.

Indian Markets: Nifty steady, rupee weakens further

Back home, the Nifty consolidated for the third straight session, ending with a marginal decline of 27 points at 26,175.

The Indian Rupee extended its losses for the fourth day, closing about 10 paise lower at 89.56 per dollar, marking a fresh record low. Vakil said the weakness is being driven by strong dollar demand, a wider trade deficit, delays in the India–U.S. trade agreement, and limited RBI intervention.

The RBI’s Monetary Policy Committee (MPC) will meet from December 3–5, with markets divided on whether the central bank will opt for a 25-bps rate cut or maintain the status quo.

Market outlook

Nifty’s broader trend remains positive, with strong support at 26,000–26,050, while 26,300 is expected to act as resistance on a closing basis.