In the barometer index, the S&P BSE Sensex tumbled 331.21 points or 0.39% to 84,900.71. The Nifty 50 index fell 108.65 points or 0.42% to 25,959.50. In two consecutive trading sessions, the Sensex fell 0.85% while the Nifty lost 0.89%.

In the broader market, the S&P BSE Mid-Cap index fell 0.27%, while the S&P BSE Small-Cap index slipped 0.83%. The market breadth was weak.

The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, rose 2.89% to 13.24.

Among the sectoral indices, the Nifty IT index (up 0.41%), the Nifty PSU Bank index (down 0.15%) and the Nifty Private Bank index (down 0.17%) outperformed the Nifty 50 index.

Meanwhile, the Nifty Realty index (down 2.05%), the Nifty Metal index (down 1.23%) and the Nifty Consumer Durables index (down 1.15%), underperformed the Nifty 50 index.

Numbers to Track:

The yield on India's 10-year benchmark federal paper was down 0.11% to 6.553 as compared with the previous close of 6.560.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 89.1850 compared with its close of 89.6650 during the previous trading session.

MCX Gold futures for 5 December 2025 settlement slipped 0.68% to Rs 1,23,341.

The US Dollar Index (DXY), which tracks the greenback's value against a basket of currencies, was down 0.07% to 100.04.

The United States 10-year bond yield declined 0.34% to 4.049.

In the commodities market, Brent crude for January 2025 settlement lost 37 cents or 0.59% to $62.19 a barrel.

Global Markets:

Most European shares traded higher, while Asian markets ended mixed on Monday, supported by growing expectations of a US Fed rate cut in December despite ongoing divisions among policymakers over the timing of such a move.

The anticipation of future catalysts drove market activity. Investors are looking ahead to the release of key economic indicators later in the week, specifically U.S. retail sales and producer prices data. Furthermore, British finance minister Rachel Reeves is scheduled to unveil her highly anticipated budget this week.

Geopolitical developments were also central to trading sentiment. Oil prices faced downward pressure after the United States and Ukraine announced the creation of an "updated and refined peace framework" aimed at ending the war with Russia, raising hopes for a potential boost in global oil supply.

On Wall Street, major averages rebounded on Friday, with the Dow Jones Industrial Average, Nasdaq Composite, and S&P 500 all closing higher.

The Dow Jones Industrial Average gained 493.15 points (1.08%) to close at 46,245.41. The Nasdaq Composite advanced 0.88% to settle at 22,273.08. The S&P 500 finished 0.98% higher at 6,602.99.

The surge followed comments from New York Federal Reserve President John Williams, who suggested the central bank might cut interest rates again this year. Williams indicated that labor market weakness now poses a greater threat to the economy than elevated inflation, making further rate cuts a possibility.

The Fed has just one meeting remaining in 2025, scheduled for December 9-10, with the current target rate range standing at 3.75% to 4.00%.

The recent record U.S. government shutdown, which concluded earlier this month, has complicated the outlook for U.S. rates. Policymakers are grappling with significant data gaps that would normally inform their view of the world's largest economy.

This issue was highlighted when the U.S. Bureau of Labor Statistics announced on Friday that it had cancelled the release of October's consumer price report because the shutdown prevented the necessary data collection.