The Indian equity markets witnessed a steep selloff on Tuesday, with the benchmark BSE Sensex plummeting 1,235.08 points (1.60%) to close at a seven-month low of 75,838.36. The index hit an intraday low of 75,641.87, down 1,431.57 points or 1.85%. The broader NSE Nifty also declined sharply, falling 320.10 points (1.37%) to settle at 23,024.65 after touching an intraday low of 22,976.85.
The market rout was triggered by heightened concerns over a global trade war after US President Donald Trump announced tariffs on neighboring countries during his inauguration day, unsettling investor sentiment worldwide.
Vinod Nair, Head of Research at Geojit Financial Services, attributed the downturn to increased volatility following the tariff announcement. “The weak recovery in Q3 earnings and a depreciating rupee are likely to accelerate foreign institutional investor (FII) outflows,” he noted.
Major drags on the Sensex included ICICI Bank, Reliance Industries, State Bank of India, Mahindra & Mahindra, Bajaj Finance, Adani Ports, Tech Mahindra, Axis Bank, NTPC, and Zomato. In contrast, UltraTech Cement and HCL Technologies emerged as the only gainers.
Global market trends provided a mixed backdrop. European markets traded higher, while Tokyo and Hong Kong ended with gains. Shanghai and Seoul settled flat. US markets were closed on Monday in observance of Martin Luther King Jr. Day.
On the commodities front, Brent crude oil slipped 0.76% to $79.54 per barrel, adding to the prevailing uncertainty in global markets.
The selloff was compounded by significant FII activity. Data from exchanges revealed that FIIs offloaded equities worth ₹4,336.54 crore on Monday, further pressuring the markets.
The downturn followed a brief rally on Monday when the Sensex rose 454.11 points to close at 77,073.44, and the Nifty climbed 141.55 points to settle at 23,344.75.
The sharp decline highlights the growing sensitivity of domestic markets to global developments, with analysts cautioning that continued geopolitical uncertainty and weak earnings recovery could lead to further volatility.