Sensex, Nifty Slide Again as Global Trade Tensions, FII Selling Spook The Market; What Caused Today’s Sell-Off

The stock market extended its losing streak for the fifth consecutive session on Thursday, January 8, as heavy selling pressure dragged benchmark indices sharply lower. The Sensex plunged over 700 points intraday, while the Nifty 50 slipped decisively below the 26,000 mark, rattling investor sentiment.

By mid-session, the Nifty 50 touched an intraday low of 25,884, down more than 200 points, while the Sensex fell to the day's low of 84,207.45, the sharpest single-day decline this week. The selling pressure is visible across large-cap, mid-cap and sectoral indices.

Markets erase Rs. 7 lakh crore in four days.

The ongoing sell-off has been costly for investors. Over the last four trading sessions, Indian equities have wiped out nearly Rs. 7 lakh crore in market capitalisation because of global and domestic headwinds.

Metal and oil & gas stocks emerged as the worst performers, falling by 3% & 2.7% each, while IT and banking stocks also remained under pressure, declining by 1.2% & 0.8% each. The Bank Nifty also stayed under pressure, shedding over 0.5% and slipping to an intraday low of 59,564, as heavyweight banking stocks failed to provide support.

Top reasons why the stock market is falling today

1. Trump tariff fears trigger risk-off mood

Fresh concerns emerged after Donald Trump endorsed a proposal for 500% tariffs on buyers of Russian oil, which could directly impact countries like India. The development stoked fears of escalating global trade tensions, prompting investors to cut exposure to risk assets. Metal and oil & gas stocks bore the brunt of this concern, with sectoral indices sliding 2-3% amid worries over higher input costs and geopolitical uncertainty.

"Advanced estimates project FY26 GDP growth at an impressive 7.4%, reflecting the resilience of the Indian economy despite Trump tariffs. However, this strength may not immediately reflect in the markets, as the much-awaited US-India trade deal, crucial for sustained growth and macro stability, is yet to materialise. Continued FII selling is also impacting the market," said VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited.

He added that a potential shift in sentiment could come if a Supreme Court verdict on reciprocal tariffs, expected soon, goes against President Trump.

"Markets have the ability to frustrate investors for long periods. Those with the right psychological attitude to weather such phases will succeed in the long run," Vijayakumar noted.

2. Persistent FII selling weighs on sentiment.

Relentless selling by foreign investors continues to be a major drag on the market. On January 7, Foreign Institutional Investors (FIIs) sold shares worth Rs.1,528 crore, marking the third straight session of outflows. So far in January 2026, FIIs have net sold around Rs. 5,760 crore. This sustained capital outflow has kept benchmarks under pressure despite relatively fair valuations in Indian large-cap stocks.

Pranay Aggarwal, Director and CEO of Stoxkart, said, "FPIs are becoming increasingly selective rather than exiting the market entirely. IT stocks attracted buying due to attractive valuations, rupee depreciation and optimism around AI-led growth and potential US rate cuts. Metals and mining benefited from government focus on critical minerals, strong domestic demand and hopes of a China recovery. Consumer services saw inflows amid improving demand, softer inflation and resilient exports."

In contrast, FPIs reduced exposure to FMCG due to stretched valuations, trimmed financials on margin and regulatory concerns, and cut auto stocks amid signs of demand moderation.

3. Heavyweight stocks drag indices lower

Losses were led by index heavyweights such as TCS, which fell nearly 2%, along with stocks like Hindalco, JSW Steel, HDFC Bank and Hindustan Unilever. Market breadth remained weak, with nearly 1,767 stocks declining out of over 3,400 traded.

4. Crude oil prices edge higher

Rising crude oil prices added to investor anxiety. Brent crude traded near $60.20 per barrel, up around 0.4%, raising concerns for an import-dependent economy like India.

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