By midday, the Sensex tumbled over 700 points, to the day’s low of 84,230, while the Nifty 50 fell over 200 points, to slip below 25,950.
The market capitalization of all listed companies on the BSE fell by Rs 7.19 lakh crore in four days to Rs 474 lakh crore.
Here’s why the market is down today
1) Trump’s Russia tariff bill raises heat on India
U.S. President Donald Trump has signaled support for a bipartisan Russia sanctions bill that could impose duties of at least 500% on Russian imports, using it as leverage against countries including India, China, and Brazil for buying discounted Russian oil. While the legislation has not yet passed, Senator Lindsey Graham suggested it could face a vote as early as next week.
Trump also flagged potential higher tariffs on Indian goods if New Delhi does not address U.S. concerns over Russian oil imports. Currently, the U.S. has already imposed tariffs of up to 50% on Indian products, with half tied to India’s imports of Russian crude.
The U.S.-India trade relationship remains complicated. Trump said Prime Minister Narendra Modi personally raised the issue of early delivery of American-made Apache helicopters with him, calling him “sir.” “I mean, I had India coming to me, sir. I’ve been waiting five years; we’re changing it. We’re changing it,” Trump said on Tuesday, recalling the interaction. “India ordered 68 Apaches, and Prime Minister Modi came to see me. Sir. May I see you, please? Yes.” He added that he has “a very good relationship with him,” while acknowledging the trade tension: “He (Modi) is not that happy with me because, you know, they’re paying a lot of tariffs now.”
These developments reflect how U.S. sanctions and tariffs are increasingly influencing investor sentiment in India, adding another layer of uncertainty to an already jittery market.
2) Heavyweight stocks drag benchmarks
Selling pressure in megacap stocks continued on Thursday. HDFC Bank and Reliance Industries extended losses, down up to 1%. Earlier this week, these two heavyweights had dropped up to 4%, amplifying overall benchmark declines.
On the day, sectorally, the metal index fell 1.9%, with all 15 constituents logging losses after a record-high this week. The IT index declined 1% following a 2.4% gain in the previous two sessions. Apparel retailer Trent also remained under pressure, down 1% after sliding up to 9% earlier this week due to rising competitive concerns.
The recent market movements have been devoid of any trend and clear direction and actions in a few mega stocks are influencing the overall market disproportionately, said Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, adding that “For instance, yesterday despite positive institutional buying Nifty drifted down by 71 points, mainly due to sharp declines in two stocks- Reliance and HDFC Bank. The large volumes in these two stocks in the derivative and cash market indicate activity associated with settlement day. In other words, the sharp dips in these stocks have nothing to do with their fundamentals; it is more technical in nature.”
3) Venezuela political upheaval
Developments in Venezuela continue to dominate global headlines, with most market reactions playing out in commodities. The crisis escalated after a controversial U.S. military operation on January 3, which resulted in the capture of President Nicolás Maduro and his wife, Cilia Flores, by U.S. special forces in Caracas. Both were transferred to the United States to face criminal charges, and Maduro currently remains in a New York jail.
The sudden upheaval has heightened geopolitical uncertainty, particularly around Venezuela’s petroleum reserves, which could influence global oil markets.
“Trump tweets and actions can always influence the market. Another important event which investors should closely watch is a possible Supreme Court verdict on Trump tariffs very soon. If the verdict goes against the reciprocal tariffs it will create huge volatility in stock markets,” said Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments.
4) Global markets subdued
Asian equities traded mostly lower on Thursday, reflecting caution after a strong start to the year. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.6%, while Japan’s Nikkei dropped 1.2% and China’s CSI300 blue-chip index declined 0.8%. Futures in the U.S. and Europe also pointed to subdued investor sentiment, with Nasdaq futures easing 0.35%, S&P 500 futures up 0.22%, EUROSTOXX 50 futures down 0.12%, and FTSE futures slipping 0.4%.
Market participants reacted to rising geopolitical tensions and trade issues, including China’s anti-dumping probe into imports of chemicals used in chipmaking, which affected Japanese chemical manufacturers negatively while boosting their Chinese peers. Investors also monitored the upcoming U.S. jobs report for clues on the Federal Reserve’s rate trajectory. Analysts at Goldman Sachs forecast a 70,000 rise in nonfarm payrolls for December, with the unemployment rate expected to edge down to 4.5%, Reuters reported.
5) Growth slowdown looms in H2 FY26
Domestic growth concerns added to investor caution, with the National Statistical Office (NSO) projecting India’s GDP to expand 7.4% in FY2026, broadly in line with ICRA’s estimate. However, growth is expected to moderate in the second half of the fiscal year, with ICRA forecasting a slowdown to 6.9% in H2 from 8.0% in H1 FY2026.
“The National Statistical Office’s First Advance Estimate placed year-on-year expansion in GDP and GVA at 7.4% and 7.3%, respectively, in FY2026, notwithstanding some differences in sectoral estimates,” ICRA noted. The rating agency highlighted that a potential contraction in government capital expenditure and the adverse impact of U.S. tariffs on merchandise exports are likely to weigh on GDP growth in H2 FY2026.
Emkay Global also weighed in, pointing out that while services and manufacturing showed strong growth so far and nominal GDP is modestly above budget expectations, sequential slowdown is possible in H2 due to US tariffs and slower government capex. “With the new GDP series coming in February, there are likely to be significant revisions to past trends. FY27 is expected to see real GDP growth around 6.5%, while nominal growth could rise to ~10%,” the brokerage said.
The moderation in growth expectations, combined with external shocks, has contributed to a cautious mood among investors, who are factoring in slower domestic demand alongside geopolitical and trade uncertainties.
6) Technicals signal non-directional trading
Market action on Thursday reflected indecision, with benchmarks showing lacklustre activity.
“Technically, after a lower open, the market registered non-directional activity throughout the day. On the downside, it took support near 26,070/84,600, while profit booking was seen near 26,200/85,100,” said Shrikant Chouhan, Head of Equity Research at Kotak Securities.
He added that intraday traders may be waiting for a breakout on either side: “A successful breakout above 26,200/85,100 could push the market towards 26,260-26,300/85,300-85,500. On the flip side, below 26,050/84,600, selling pressure is likely to accelerate, with levels slipping to 25,950-25,900/84,300-84,200.”
Chouhan suggested a cautious strategy, noting that buying between 26,150–26,100 with a stop loss at 26,050 may be prudent for traders amid the current indecisive market structure.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
