Indian equity markets witnessed a sharp sell-off on Monday, making the first trading session of the week a disappointing one for investors. Weak global cues dragged benchmarks lower at the opening bell, with both key domestic indices starting deep in the red.
In early trade, the BSE Sensex slipped nearly 600 points to hover around the 82,950 mark, while the Nifty 50 dropped over 200 points, trading close to 25,500. The negative sentiment was already visible in GIFT Nifty, which had been down by more than 150 points in the morning, setting the tone for Dalal Street.
Reasons Behind the Market Decline
1. Global Markets Fall on Trump’s Tariff Warning
Fresh concerns over global trade emerged after former US President Donald Trump issued a warning to European nations over Greenland-related opposition. He indicated that countries resisting his plans could face steep import tariffs.
This statement has unsettled markets worldwide, from the US to Asia. Market experts warn that the possibility of renewed trade tensions could lead to heightened volatility in the coming days.
2. Pressure from Heavyweight Stocks
Shares of Reliance Industries came under selling pressure following the announcement of its Q3 results. While the company’s profit met expectations, a slight dip in margins triggered profit booking among investors.
Similarly, ICICI Bank’s quarterly performance was largely in line with estimates, yet the stock declined nearly 3 percent in early trade. Weakness in these heavyweight stocks added significant pressure on the Nifty.
3. Continued Selling by Foreign Investors
Foreign Institutional Investors (FIIs) have continued to pull money out of Indian equities. So far in January, FIIs have sold shares worth approximately ₹16,600 crore.
Although Domestic Institutional Investors (DIIs) remain net buyers and are attempting to cushion the market, their support appears insufficient against strong global headwinds.
4. Surge in Gold and Silver, Stronger Dollar
Rising global uncertainty has pushed investors toward safe-haven assets. Gold prices jumped about 1.6 percent to cross $4,670, marking a record high, while silver surged over 3 percent.
At the same time, fluctuations in the dollar index following Trump’s remarks have put additional pressure on the Indian rupee.
Market Outlook
Market analysts believe volatility is likely to persist throughout the week. Investors are closely tracking China’s GDP numbers and Europe’s inflation (CPI) data, which could further influence global sentiment. Any disappointing data may deepen the ongoing correction.
Back home, the ongoing earnings season is expected to drive stock-specific movements. From a technical perspective, the 25,500 level is seen as a crucial support zone for the Nifty, and its ability to hold this level will be key in determining near-term market direction.
